There's a platinum lining in South Africa as Lonmin talks black empowerment

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The Independent Online

Lonmin, the mining group, is in talks with black empowerment groups in South Africa, which could see them take a large minority stake in its platinum business, Lonplats.

The operation is 73 per cent owned by Lonmin with the remaining 27 per cent held by Impala, the South African mining group. Lonmin's chairman, Sir John Craven, has admitted the group is in talks with Impala but has denied this might lead to a merger.

However, David Brown, Impala's finance director, has let slip the nature of the talks. "There are only two shareholders in Lonplats and getting a black empowerment partner into those assets would require those two shareholders getting together to assess that opportunity. Lonmin and Impala have been talking about introducing black empowerment partners into those assets," said Mr Brown.

It is understood that the plan is for Impala to sell its 27 per cent stake in Lonplats, with black empowerment groups buying most of it. The plans explain why Lonmin has hired Brian Gilbertson, the former chief executive of BHP Billiton, as a consultant. He formerly ran Impala.

Impala has not said which empowerment groups are in talks, but the favourite would be Bafokeng, the tribal group which owns the land where most of South Africa's platinum mines are based. The Pretoria government has been pressing companies operating in South Africa to bring black groups into their businesses.

Last week banking group Investec sold a 25.1 per cent stake to a black empowerment consortium made up of two investors, Peu and Tiso Group, a development trust and an employee trust.

Lonmin received a boost last week when AngloGold agreed a deal to merge with Ashanti, the Ghanaian company where Lonmin has a 28 per cent stake. A merged deal would give Lonmin a stake in a more stable business than Ashanti, which was nearly bankrupted four years ago after striking bad deals in the futures market.