Impala Platinum Completes Takeover of Royal Bafokeng Platinum

South African platinum miner, Impala Platinum (Implats), has successfully completed its bid to control Royal Bafokeng Platinum (RBPlat), raising its stake to 91%. The acquisition process involved purchasing a 34.5% stake in RBPlat from fellow South African miner, Northam, for R9 billion ($505 million) and around 30 million Implats shares.

The rivalry between Northam and Implats to gain control of RBPlat had been ongoing for more than a year. Implats first announced its intention to acquire RBPlat in November 2021 and subsequently acquired a 24.5% stake in the company. In response, Northam acquired its initial 32.8% stake in RBPlat.

The competition continued as both companies incrementally increased their shareholdings in RBPlat, aiming for a total controlling takeover. However, Northam withdrew its bid in April 2023, citing consistent lull in platinum prices, and Implats took advantage, raising its stake to above 50% the following May, granting it controlling power. Now, with a 91% stake, Implats has become the majority owner of RBPlat.

The primary motivation behind both companies' desire for control over RBPlat was access to its high-quality platinum deposits, particularly the Bafokeng-Rasimone platinum mine, one of the world's largest, which produced around 160,600 ounces of platinum in 2022. Implats already owns the world's largest platinum mine, the Impala Mine, which was responsible for 667,420 ounces of production in the previous year.

Platinum's significance has grown due to shortages in palladium, another platinum group metal. Platinum has become a substitute for palladium in catalytic converters for cars. The rising importance of platinum, coupled with infrastructure challenges in South Africa, the world's leading source of platinum, has led to fears of a shortfall in platinum production in 2023, resulting in a rise in platinum prices.

While this price increase may benefit Implats shareholders, who can capitalize on the higher platinum prices, it also puts more pressure on the company to increase output as it now owns two of the world's most significant platinum projects.

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