African Rainbow Minerals (ARM) expects Harmony Gold’s bid for rival Gold Fields to take its “natural course”, ARM executive chairman Patrice Motsepe said this week. ARM has a 16,2% stake in Harmony Gold.
Motsepe noted that exciting opportunities would emerge from Harmony’s bid. “We are really supportive of the initiative in terms of the huge synergies that will be unlocked when the two companies work together. We are confident that, in the interest of Harmony and Gold Fields shareholders, appropriate steps will be taken to ensure that there is a creation and a development of value rather than the continuous challenges that are currently underway,” he told delegates at the Mining Indaba in Cape Town.
Harmony is bidding to merge with Gold Fields to form the world’s largest gold miner. The Competition Commission was due to release its ruling on the transaction this week.
ARM has mining interests in platinum group metals, nickel, iron ore, manganese and chrome and is well- positioned to participate in future empowerment transactions in the resources sector, Motsepe said. He added that the strong rand is hindering empowerment deals in the mining sector.
The Two Rivers Platinum project in Mpumalanga is in the process of approval, Motsepe said. Once the Two Rivers project is up and running, ARM will have a 45% stake, world number two platinum miner Impala Platinum a 55% stake and an empowerment group will have a 5% stake. At ARM’s Nkomati Nickel operation, also in Mpumalanga, a large open-pit expansion is being assessed with a capital forecast at about R2-billion, ARM CEO Andre Wilkens said.
ARM’s iron ore operations produced 6,3-million tons in 2004 and the group is currently conducting a feasibility study into increasing its output to between 10-million tons per annum and 15-million tons per annum. — I-Net Bridge