Northam Platinum Shares Sale Helps it Join South Africa’s Mining Big League

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Northam Platinum Ltd. will sell shares under a 6.6 billion-rand ($600 million) plan to raise black South Africans’ stake in the company, owner of the world’s deepest mine producing the metal, to more than a third.

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Northam will sell more than 112 million new shares at 41 rand each to black shareholders for 4.6 billion rand, the Johannesburg-based company said today in a statement. Those shareholders will also buy 47.7 million shares from Public Investment Corp., South Africa’s largest fund manager, for 2 billion rand. That will bring the holdings to 35.4%, Bloomberg News reported.

The company will use “the injection of 4 billion rand free cash to fund Northam’s growth,” it said in a statement. “The transaction effectively catapults Northam into the ‘1st division,’” Northam said, referring to the largest producers including Anglo American Platinum Ltd. (Amplats) and Impala Platinum Holdings Ltd. (Implats).

South African mining companies face a December deadline to raise black South Africans’ holdings to at least 26%, a policy aimed at redressing economic disparities created during apartheid. The stake of Northam’s previous main black owners, Afripalm Resources and Mvelaphanda Holdings Ltd., was eroded as the companies had to sell part of their stakes to repay loans.

At JPY 4,375 ($40.18) per gram, Japanese platinum bar moved up 2.3% on Tuesday, October 21, the day’s biggest change. The price of Chinese platinum bar steadied at CNY 267.00 ($43.47) per gram following two-days of increases. US platinum bar held its value yesterday at $1,241 per ounce.

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Chinese palladium bar prices inched up 0.6% to CNY 167.00 ($27.19) per gram. At JPY 2,677 ($24.59) per gram, the price of Japanese palladium bar was essentially unchanged. US palladium bar saw little change in its price yesterday at $751.00 per ounce.

Japanese gold bullion finished the day up 0.9% to JPY 4,271 ($39.23) per gram. Indian gold bullion prices rose 0.9% to INR 27,635 ($450.78) per 10 grams. The price of Chinese gold bullion rose 0.6% to CNY 245.60 ($39.99) per gram after a two-day drop. The price of US gold bullion remained essentially flat at $1,238 per ounce.

After a 0.7% increase, Japanese silver finished the day at JPY 595.00 ($5.47) per 10 grams. After falling for two days, the price of Chinese silver rose 0.4% to CNY 3,890 ($633.37) per kilogram. Following a 0.3% rise on Tuesday, the price of Indian silver closed at INR 39,335 ($641.63) per kilogram. The price of US silver flattened at $17.27 following two-days of declines.

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