- Impala Platinum and Northam Platinum are in a competative bid to by platinum group metals (PGM) producer Royal Bafokeng Platinum
- South Africa's Public Investment Corporation (PIC) is the major shareholder in Impala Platinum and Northam Platinum
- PIC retains a major influence over the strategic direction of both companies
Harare-Impala Platinum is awaiting the decision of its major shareholder, South Africa's Public Investment Corporation (PIC), which is faced with two choices regarding the acquisition of platinum group metals (PGM) producer Royal Bafokeng Platinum. The company is currently engaged in a competitive bid to take over RBPlat, with Northam Platinum being a major competitor.
PIC, the state-run asset manager, is the largest shareholder in both Impala Platinum (Implats) and Northam Platinum. It has a stake of 20.01% in Impala, 17.15% in Northam, and 9.42% in RBPlats. This significant investment gives PIC a major influence over the strategic direction of both companies.
This substantial investment makes PIC a potential kingmaker in the bidding war between the two companies, should it choose to support either bid.
Impala owns 40.71% of RBPlat, and Northam 34.52%. Demand for RBPlat is high due to its substantial, shallow, and high-grade PGM reserves, which recorded a yield of 467,000 ounces in 2021.
Impala Chief Executive Officer Nico Muller expressed frustration at the drawn-out transaction, saying "the uncertainty is not constructive for any party."
"It is important for us to stress the importance of driving this process to a close." We have had a firm undertaking from PIC that they will, in the next few weeks, make a decision one way or another," Muller told a result briefing.
Impala, the nation's premier platinum producer, reported a 9% decrease in refined PGM production in the latter half of 2022 due to forced outages and a furnace revamp affecting smelting operations. This resulted in an estimated loss of 38,000 refined PGM ounces, or about 3% of total output, due to load shedding by state electricity provider Eskom.
The reduction in profits was largely driven by the company's major division, Zimplats, which reported considerable losses and substantial volume reductions across its subdivisions.
Shares of Impala Platinum Holdings Limited (Impala) plunged more than 5% after the company reported a 2.1% decrease in half-year profits due to widespread power outages and a furnace rebuild that affected production.
The company's headline earnings per share (HEPS) for the period ending December 31st was 16.54 rand ($0.9089), a decrease from the previous year's figure of 16.90 rand.
Refined output for Impala declined 9% to 1.476 million ounces from 1.617 million ounces in the same period last year. South Africa, the world's leading producer of platinum group metals (PGM), continues to suffer from extended electricity cuts due to the frequent breakdowns of its coal-fired power plants.
Should its bid to acquire RBPlat fail, Muller said Impala could either retain its current shareholding and forge a joint venture with Northam, which he said "is not ideal," or sell its stake.
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