{"id":13084,"date":"2014-02-21T09:27:31","date_gmt":"2014-02-21T09:27:31","guid":{"rendered":"http:\/\/praag.org\/?p=13084"},"modified":"2014-02-21T09:27:31","modified_gmt":"2014-02-21T09:27:31","slug":"chinese-want-to-buy-sa-platinum-assets-on-the-cheap-after-strikes","status":"publish","type":"post","link":"https:\/\/praag.org\/?p=13084","title":{"rendered":"Chinese want to buy SA platinum assets on the cheap after strikes"},"content":{"rendered":"

\"platinum<\/a>Bloomberg reports that China\u2019s Long March Capital Ltd., which partners with Citic Group Corp., is considering buying South African platinum assets after their value was depressed by strikes, the company\u2019s Managing Partner Clement Kwong said.<\/p>\n

The company is now reviewing a decision to hold off on purchasing South African platinum assets because of the labor issues, Kwong said in a Feb. 19 interview in Johannesburg. Long March last year partnered with Citic unit Baiyin Non-Ferrous Metal Group Co. Ltd. and China-Africa Development Fund to complete their buy-out of Perth-based Gold One International Ltd. and indirectly acquired a stake in Westonaria, South Africa-based Sibanye Gold Ltd.. (SGL)<\/p>\n

\u201cIf the industry survives and makes a profit then that would be a good signal to look at investing,\u201d said Kwong, who founded Long March Capital with a partner in 2008. \u201cThis last round has repriced these assets down so I think it would be as cheap as it gets.\u201d<\/p>\n

Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI) say they have lost 4.4 billion rand ($399 million) of revenue because of a four-week strike by about 70,000 workers. The companies, which together produce about three quarters of the world\u2019s platinum, suffered losses from weeks of walk-outs in 2012 and 34 protesting miners were killed by police at Lonmin\u2019s Marikana mine on Aug. 16 that year.<\/p>\n

The platinum workers are demanding that monthly wages for the lowest-paid underground laborers be more than doubled to 12,500 rand a month. The Association of Mineworkers and Construction Union, which represents the employees, rejected a pay-increase offer of as much as 9 percent. South Africa\u2019s annual inflation rate is 5.8 percent.<\/p>\n

Share Decline<\/h3>\n

Anglo American Platinum declined 0.6 percent in Johannesburg yesterday to 450.37 rand, giving it a market value of 121.5 billion rand, a third of its value when it reached a record in 2008. Lonmin has declined by three quarters since its 2008 record while Impala has fallen 64 percent.<\/p>\n

\u201cThere is a current situation that has not been resolved,\u201d Kwong said. \u201cBut we think we are scraping the bottom now. I don\u2019t see how much worse the demands can be.\u201d<\/p>\n

Long March Capital advises and manages the group of investors, which in December completed their purchase of Gold One. The mining company acquired a 17 percent stake in Sibanye in August.<\/p>\n

Long March Capital remains \u201cvery positive\u201d on the \u201cphenomenal number\u201d of investment opportunities in South Africa, although it\u2019s wary of labor issues and discussion by the ruling African National Congress of additional taxes and nationalizing the nation\u2019s mines, Kwong said.
\n\u2018Huge Opportunity\u2019<\/p>\n

The ANC in 2012 backed higher taxes for mines and rejected proposals to nationalize mines, an idea that the party\u2019s youth wing had promoted for two years.<\/p>\n

\u201cSome of the challenges like organized labor, the somewhat unclear regulatory environment, these are discouraging to further investment,\u201d Kwong said. \u201cBut the underlying economics, the underlying resources, still present huge opportunity for further investment.\u201d<\/p>\n

South Africa is the continent\u2019s largest coal and gold producer and holds the world\u2019s biggest reserves of platinum and chrome. Jinchuan Group Ltd. and the China Development Bank in 2011 bought a 45 percent stake in Wesizwe Platinum Ltd. (WEZ) State-owned China National Arts & Crafts Corp. Last month bought Aquarius Platinum Ltd.\u2019s (AQP) Blue Ridge and Sheba Ridge mines for $37 million. Glencore Xstrata Plc (GLEN) said in November it would like to sell its 24.5 percent stake in Lonmin.
\nCongo, Zimbabwe<\/p>\n

As Long March Capital seeks to expand into Africa, it is also doing due diligence on mine projects in Democratic Republic of Congo and will look at assets in Zimbabwe next week, Kwong said.<\/p>\n

\u201cThe more de-risked a project, the easier it is to get funded today so something without even a pre-feasibility report is a little difficult to swallow,\u201d Kwong said. \u201cBut if it is near production, but requires a substantial amount of capex to take it into production in order to unlock value, that is probably our favorite type of profile. We do have access to a reasonably priced source of capital in order to provide the capex to unlock the projects.\u201d – Franz Wild, Bloomberg.com<\/p>\n","protected":false},"excerpt":{"rendered":"

Bloomberg reports that China\u2019s Long March Capital Ltd., which partners with Citic Group Corp., is considering buying South African platinum assets after their value was depressed by strikes, the company\u2019s Managing Partner Clement Kwong said. The company is now reviewing a decision to hold off on purchasing South African platinum assets because of the labor … Continue reading “Chinese want to buy SA platinum assets on the cheap after strikes”<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":13085,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,3],"tags":[1106,144,8417,8416,768,799,12250],"class_list":["post-13084","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-and-finance","category-news","tag-amplats","tag-china","tag-impala","tag-long-march-capital","tag-lonmin","tag-platinum","tag-south-africa"],"cc_featured_image_caption":{"caption_text":false,"source_text":false,"source_url":false},"jetpack_featured_media_url":"https:\/\/praag.org\/wp-content\/uploads\/2014\/02\/platinum-ingots.jpg","_links":{"self":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/13084","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13084"}],"version-history":[{"count":2,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/13084\/revisions"}],"predecessor-version":[{"id":13087,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/13084\/revisions\/13087"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/media\/13085"}],"wp:attachment":[{"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}