Implats’ recent acquisition of a further 1.36 million shares takes it another step closer to acquiring the entirety of RBPlat.
Impala Platinum (Implats) has concluded agreements to acquire a further 1.36 million shares in Royal Bafokeng Platinum (RBPlat), seeing its stake increase to 38.86 percent.
This is only a small step in its plans to acquire the entirety of RBPlat, however. “From the beginning of our discussion with RBPlat, we had always intended to acquire the entire company and combine it with our operations to realise the full value of operational benefits and synergies of two contiguous operations, which no other company has the ability to do,” explains CFO Meroonisha Kerber.
Implats engaged with RBPlat on this basis, and is discussing an offer that was to be made to all shareholders on the same terms, to ensure they were treated equally.
“Following the sale of RB Holdings’ shares to another party, this was not possible and hence we acquired an upfront stake of 24.5 percent from shareholders who did not have the opportunity to sell, and launched a mandatory offer to RBPlat shareholders following us crossing the 35 percent offer threshold with the same objective of acquiring all of the shares, albeit through a different route,” Meroonisha says.
The offer officially opened on 17 January 2022, and is subject to final regulatory approval from the competition authorities. “We have allowed for shareholders to sell to us for immediate settlement, up to specific levels so we don’t breach any control thresholds, and this has been the increase in shareholding seen in the market,” she explains. “We may continue to acquire more RBPlat shares while our offer remains open.”
The value proposition
According to Meroonisha, the offer, which is the only offer on the table capable of acceptance by RBPlat shareholders, offers an attractive value proposition for both companies and their respective shareholders. “The value proposition is significant for all stakeholders, as Implats is the only company that could extract and deliver on the future operational benefits of the significant, unique regional synergies presented by these contiguous operations, given its comprehensive experience of the ore body and its ability to leverage cost effective opportunities for future growth,” she says.
She adds that the ability to potentially extend Impala Rustenburg’s life of mine will also deliver tangible socio-economic benefits for the region, its communities, and South Africa as a whole, including employment security and through sustained indirect benefits for the various industries and stakeholders supported by mining activities in the greater Rustenburg region.
“For Implats’ shareholders, the offer, if implemented, will deliver on the company’s stated value-focused strategy to increase exposure to low-cost, shallow, mechanised assets, further positioning the group to ensure a portfolio of high-value, sustainable and competitive operations through the cycle,” Meroonisha says.
She explains that, for RBPlat shareholders, the offer provides a compelling value proposition by crystallising inherent equity value at an attractive premium, through the receipt of a combination of cash and a company that offers exposure to a global mine-to-market portfolio, regionally diverse operations and an attractive and sustainable dividend yield.
ESG growth opportunities
Meroonisha says that Implats is continuously assessing growth opportunities, both organic and acquisitive. “We have a strong pipeline of attractive and value accretive internal growth projects, which we have announced and committed to spend R50 billion on in the next few years.”
She explains that this is across Implats’ global operations, as well as new projects in order to create a sustainable business going forward.
Implats’ key focus projects include advancing attractive internal projects, like Zimplats and Two Rivers Platinum, across mine to market operations. It also aims to advance internal projects and studies to the expansion of its downstream processing capacity, and its decarbonisation efforts, as well as strengthening energy security and its position in the new energy value chain.
“In 2021 we crystallised our ESG framework to guide integration and to elevate sustainability issues into our business processes,” Meroonisha says. “A key social component in our ESG framework is the mine community social performance, in which we have identified key focus areas.”
These focus areas include community health and wellbeing, education and skills development, inclusive procurement and enterprise development, as well as infrastructure and housing. “During 2023 we will be refining our 2030 targets, considering the various compliance-driven programmes that we already deliver on, and supported by five-year operational social performance plans,” she adds.
Meroonisha explains that a second part of the framework relates to the 2030 environmental strategy, which Implats completed during 2022. “In this strategy a number of targets were set, with a key development around our 30 percent carbon reduction goal by 2030 to support our long-term ambition of carbon neutrality by 2050.”
Impala Canada is already 95 percent powered by renewable hydro power (five percent natural gas), and Zimplats’ energy mix is 50/50 thermal to renewable hydro power. “We have started execution of a 35MW solar power plant at Zimplats, the first phase of the 185MW solar power programme, and are completing a feasibility study for a Marula solar power plant (33MW),” she says. “Our Rustenburg operations and refineries will see a combined 2030 renewable energy portfolio of close to 300MW.”
She further explains that Implats will be looking at both independent power producer markets and self-funded options to finance these projects.
“The RBPlats deal has significant potential to amplify our social and environmental performance, through collaboration with the RBN for scaled impact. For example, we will continue to collaborate with the RBN on community development programmes. In order to accelerate our decarbonisation ambitions, we envisage a possibility for a large RBN-owned solar power plant that we could sign a long-term power off-take agreement,” she concludes.
