Patrice Motsepe’s African Rainbow Minerals acquires Bokoni platinum mine for $220 million

African Rainbow Minerals (ARM), the South African mining company founded by billionaire Patrice Motsepe, is acquiring the Bokoni platinum mine for R3.5 billion ($220 million) in cash. The mine was earlier shut down by Anglo American Platinum (Amplats) and Atlatsa Resources (Atlatsa Resources). It plans to invest R5.3 billion ($334 million) annually in developing the operation.

Bokoni, which was established in 1969, was previously called Lebowa Platinum.

Amplats expanded the mine 20 years ago. It was one of the first major Black economic empowerment deals that the company implemented in 2007.

Due to difficult mining conditions, the mine later became uneconomical. The mine was later renamed Atlatsa and placed on care in 2017 due to a severe downturn on the platinum market.

ARM published a statement today, indicating that it is acquiring Bokoni due to the mine’s large platinum group metals resources and because it is a “natural fit” with the company’s other platinum operations in the Eastern Limb, which include the Modikwa, or Two Rivers, mines.

At Bokoni, ARM plans to develop a new mine that will focus on the UG2 Reef.

Previous operations were primarily focused on the Merensky Reef.

Fully-mechanised mining methods will be used to exploit high-grade mining areas and better ground conditions.

According to ARM, the new mine plan will “position Bokoni in the lower half of the PGM price curve,” as it will be relatively shallow at 600 meters. This will allow for potential scale benefits and operational optimization due to its proximity to other Eastern Limb PGM operations.

Motsepe, chairman of ARM, said: “The acquisition and development … would enable us to scale out our PGM portfolio and improve ARM’s global competitiveness, and allow us pursue further value accretive, organic growth.”

When news broke that ARM was discussing the acquisition of Bokoni, some analysts speculated that this could lead to a spin-off of ARM’s platinum business as a separate company.

ARM stated that the acquisition will make the group a “significant” global primary PGM manufacturer, with a target of more than 1.2 metric ounces (on a 100-percent basis) annually and 650,000 ounces (on an attributable basis) by 2026.

Under the agreement, ARM will sell Bokoni concentrate to Amplats for a term of 23 years, starting with the first concentrate delivery from the mine.