[miningmx.com] – CANADA’s Eastern Platinum (Eastplats) has sold its South African assets to the state-owned Chinese company Hebei Zhongbo in a cash deal worth $225m, the company announced on November 7.
Ian Rozier, CEO of Eastplats, cited difficulties raising capital for platinum projects and production in the current market.
“The capital required to advance the Eastplats assets into production is not available in
the public markets at this time and we are very encouraged by the ability of Hebei Zhongbo to deploy its resources in this regard,” said Rozier in a statement.
“This foreign capital and the creation of much needed jobs will contribute to the ongoing socio-economic development in areas surrounding the mine and projects,’ he said.
The Eastplats assets consist of the Crocodile River Mine, and the Spitzkop, Kennedy’s Vale and Mareesburg projects.
“Closing the transaction will leave Eastplats extremely well capitalized to take advantage of the considerable opportunities in this weak market,’ said Rozier.
The transaction represents investment by another Chinese company in the South African mining industry recently.
Beijing Haohua Energy recently lifted its stake in Coal of Africa while on September 12 Hebei Iron and Steel on September 12 said it had signed a deal to take a 51% stake in a venture with the Industrial Development Corporation and the China-Africa Development Fund to build South Africa’s biggest overseas steel mill.
Wesizwe Platinum, which is building the R10.7bn, 420,000 ounce a year Bakubung platinum mine is controlled by Jinchuan and the China-Africa Development Fund.
Market pressure finally pushed Eastplats to close in May 2012 its Mareesburg open-pit project and Kennedy’s Vale Concentrator Project.
It had reported an operating loss in each of the four quarters of 2011, but the fourth-quarter performance booked a $76.5m loss. A year later, Eastplats suspended the development of its Crocodile River Mine.
