Royal Bafokeng Platinum (RBPlat) has climbed 17 spots to third place in this year’s Sunday Times Top 100 Companies. No other company in the top 10 has come close to achieving this feat.
The mid-tier producer of platinum group metals (PGMs) has been the subject of a high stakes contest between Impala Platinum Holdings (Implats) and Northam Holdings, as both seek a controlling stake.
Northam, in November last year, announced it had bought a 34.5% interest in RBPlat from its parent company, Royal Bafokeng Investment Holding Company (RBIH), with options and a right of first refusal to acquire a further 3.28%.
Meanwhile, Implats’ deal to gain control of RBPlat was already in progress. When RBPlat closed its books for the six months to June 30 this year, Implats’ share was just below 40%. Implats requires 42% to gain control of RBPlat. Finalisation of its takeover offer has been stalled by Northam’s application to become an intervening party in the Competition Tribunal merger hearing.
Weighing up the two bids, RBPlat CEO Steve Phiri said a merger with Implats would result in operational, community, labour and cost synergies because the two companies’ operations are contiguous to each other. While the Northam offer did not present the same synergies owing to the distance between their operations, Phiri said both companies had good-quality assets with long-life mines and good management. He noted that Implats had a slight advantage.
The lengthy process to finalise a deal has created some uncertainty.
Phiri characterised the takeover bids as “the biggest challenge ... that has been raging for the past 18 months or so. When that happens in any corporate, it distracts people, the workers and everyone else. The market becomes uncertain. The longer it takes, the more uncertainty is perpetuated.”
Phiri also lamented the decision by RBIH to sell its shares, saying as a majority shareholder and parent company, RBIH should have been there to provide leadership and be “a catalyst for consolidation between the target company and the acquirer. That did not happen”.
Consequently, Phiri has been leading a stakeholder management communications strategy targeted at employees, organised labour and communities to ensure they stay on course and that the company does not produce poor results.
The messaging appears to have succeeded as the half-year production to end-June increased by 4.5% to 225,500 PGM ounces, despite operational challenges related to geological conditions at Styldrift mine.
RBPlat attributed the challenges to Styldrift being a mechanised mine, requiring specific skills that are in short supply, and as a result equipment maintenance and machine availability were affected. Outside help has since been brought in.
Due to higher costs as well as lower basket prices, headline earnings per share plummeted 58% to R7.67. RBPlat cut its interim dividend by half to R711m.
In line with its tagline, “More than mining,” the owner of Bafokeng Rasimone platinum mine (BRPM), Styldrift and the BRPM and Maseve concentrator plants is conducting a feasibility study to generate 98MW of clean, green solar power to boost its energy security and reduce mining inflation. This marks part of RBPlat’s road map to net-zero carbon emissions by 2050.
The feather in the PGMs producer’s cap is the delivery of two state-of-the-art schools it built in partnership with the North West department of education. The school is located close to the company’s flagship Waterkloof Hills Estate, which is an employee housing development that broke ground in 2013.
The Waterkloof Hills primary and secondary schools received their first learners early this year though they were only officially opened in August. The two schools will be opened to all learners in the area and not only children of the 5,000 employees living at Waterkloof Hills Estate. Ultimately, the two schools will have a student population of 2,000.
“Those two schools are beautiful. I implore people to just pass by and see the schools in Rustenburg. I think it’s not just RBPlat that should take pride, it is the department of mineral resources & energy that has been the facilitator in the Social and Labour Plan for the mining industry as a whole,” says Phiri.
• Read all the stories about the 2022 Top 100 Companies here.
• For more about the winners in previous years, and to read past supplements, go to Sunday Times Top Companies
