Sibanye, Northam among suitors of Anglo's Union mine
Anglo American Platinum kicked off the sale process for the Union mine and concentrator in October.
LONDON - African precious metals mining firms Sibanye Gold and Northam Platinum are among a group of about 10 companies interested in Anglo American Platinum's Union mine in South Africa, Sibanye and mining industry sources said.
Anglo American Platinum (Amplats), a unit of global miner Anglo American, kicked off the sale process for the Union mine and concentrator in October as part of its attempt to shift away from old, deep, labour-intensive mines to newer, more mechanised mines such as open pit Mogalakewna.
The Union mine, one of Amplats' worst-performing, had an operating margin of 1.4 percent in 2013 compared with a 36 percent margin for Mogalakwena.
A first round of bids is expected early next year, one of the industry sources said, but there is a large gap between the seller's and the buyers' expectations.
"We will consider and participate in any process involving any sale of platinum assets, but we don't currently see the same opportunities in platinum that we saw eight months ago," Sibanye spokesman James Wellsted said when asked about its interest in the Union mine. "The implied value that the platinum producers seem to expect, appears to be a lot higher than where we would see value accretive opportunities."
A second industry source said Amplats would be looking to sell the mine for around $200-$300 million but that the current weakness in the platinum price may curb bids.
"It's not exactly a seller's market at the moment," he said.
Platinum fell to a five-year low last month and is hovering around $1,220 an ounce, well below its 2008 peak of nearly $2,300.
Another source said he thought Johannesburg-listed Northam, a mid-tier producer, had more chance of success than the other bidders given its experience.
"Northam would be the ideal candidate, they already operate in platinum nearby and they do know how to mine that ore body," he said.
Northam said in August that it was looking to snap up platinum assets in a shake-up of the country's platinum sector.
Gold producer Sibanye, a spin-off from bullion miner Gold Fields that specialises in operating deep underground mines, also said earlier this year it planned to make an acquisition in platinum.
A spokesman for Anglo American declined to comment. Northam was not immediately available to comment.