Northam Platinum is considering making an offer for the mothballed Bokoni mine as it seeks to expand output and capitalise on a rally in platinum-group metal prices, according to three people familiar with the plan.
South Africa’s fourth-biggest platinum producer has evaluated a bid for Bokoni but no final decision has been taken and the company is yet to conduct due diligence, said the people, who asked not to be identified as the proposal hasn’t been made public. Bokoni is jointly owned by Anglo American Platinum Ltd. and Atlatsa Resources Corp.
Northam is seeking to boost output amid a bullish outlook for the metals, which are used to extract pollutants from vehicle exhaust fumes, said the people. Siyanda Resources Ltd. was also looking at buying Bokoni. Business Day earlier reported the interest of the two companies.
Rhodium and palladium prices have surged with demand for the metals rebounding to the levels it was at before the coronavirus outbreak as China’s economy gains momentum.
The interest in Bokoni may suggest that higher metals prices are rekindling investors’ interest in reviving some of the mines in South Africa that were shut as producers struggled to contain costs. Six platinum group metals are found in the seams mined in South Africa including rhodium, the world’s priciest precious metal, as well as some gold and base metals such as nickel.
The unit of Anglo American Plc placed Bokoni on care and maintenance in 2017 as it sought to wind down and sell older and less profitable operations to focus on more mechanized mines. The process to sell the Bokoni mine is “advanced,” said Jana Marais, a spokeswoman for Anglo Platinum. The sale process is “well progressed,” Chief Executive Officer Natascha Viljoen said in an interview on Wednesday.