September 14, 2017 / 7:58 AM / in 2 months

South Africa's Implats reports loss after deal write-down

JOHANNESBURG (Reuters) - South Africa’s Impala Platinum (Implats) reported a 2017 loss after writing off part of the value of a deal a decade ago with a black partner that helped the miner meet a target to have some black shareholders, the company said on Thursday.

Implats, the world’s second biggest platinum producer, posted a headline loss per share for the year to June 30 of 137 cents, in line with the figure previously flagged to the market, compared to headline earnings per share of 12 cents in 2016.

The firm wrote off 10.2 billion rand ($775 million) related to a 2007 deal to fund a stake in Implats’ shares by black-owned Royal Bafokeng Platinum.

South African mining companies are required to meet a target of having 26 percent of their ownership held by black citizens, part of a drive to rectify the racial disparities of apartheid.

“In 2007, Impala prepaid the estimated contractual Royal Bafokeng royalty and the Royal Bafokeng used this prepayment to subscribe for shares in Implats,” Implats said, referring to a deal that helped Implats meet the black ownership target.

The royalty was prepaid to the Bafokeng tribe because the platinum is on their territory but the platinum price performance since then meant the firm now considers it overpaid.

Implats said its view the royalty payment’s value had “changed materially since 2007 given unexpected, persistently low metal prices and depressed levels of production.”

Implats also faced losses at its Marula mine, where output has been disrupted by protests from residents angry over the way their 50 percent stake in a nearby chrome project has been managed.

It said mining at Marula produced 67,900 ounces of platinum concentrate in the year to June, compared with 77,700 tonnes a year earlier.

“If Marula does not meet the stated objective of being cash neutral at group level for whatever reason, there will be no other option but to suspend operations,” it said.

($1 = 13.1281 rand)

Reporting by Ed Stoddard; Editing by Edmund Blair

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