Impala Platinum increases stake in Royal Bafokeng to 91%

South African platinum miner Impala Platinum (Implats) has completed its bid to control Royal Bafokeng Platinum (RBPlat) after increasing its stake to 91%.

Implats, already held a 56.5% stake before it purchased fellow South African miner Northam’s 34.5% stake in the company. Northam will receive R9bn ($505m) and around 30 million Implats shares.

Northam and Implats had both been vying to secure control of RBPlat, another South African platinum extractor, for more than a year. After Implats announced its intention to purchase RBPlat in November 2021, Northam acquired its initial 32.8% stake in the company. That same month Implats acquired its own 24.5% stake in RBPlat.

Since then, the two have been incrementally increasing shareholdings in RBPlat while looking to complete a total controlling takeover.

Northam tabled a bid in November 2022 to purchase the remaining 66.5% of RBPlat that it did not already own, but withdrew the bid in April 2023, citing a consistent lull in platinum prices. The following May, Implats upped its stake to above 50%, granting it controlling power, and now Northam has divested entirely.

Both companies desired access to RBPlat’s high-quality platinum deposits. These include the Bafokeng-Rasimone platinum mine, among the world’s largest, which produced an estimated 160,600oz of platinum in 2022. Implats already holds the world’s largest platinum mine, the Impala Mine, responsible for 667,420oz of production last year alone.

Platinum has risen in importance as shortages in another platinum group metal, palladium, have grown more prevalent. Platinum is substituted for palladium as a core component in catalytic converters for cars.

However, infrastructure issues in South Africa, the world’s largest source of platinum, are threatening output and triggering fears of  a shortfall in platinum production in 2023. As such, the price of platinum is growing.

While this bodes well for Implats shareholders, who may be able to capitalise on the increased platinum price and importance, more onus will now be on the company to increase output as the owner of two of the world’s most important platinum projects.