South Africa: Implats Acquires Canadian Palladium Operation As It Pivots to Mechanised Mining

analysis

Following a trail blazed by Sibanye-Stillwater, Impala Platinum has branched out into North America and palladium, one of the rising stars among platinum group metals (PGMs), with the purchase of Canadian company North American Palladium for $758-million.

South Africa's Impala Platinum (Implats) has taken a big step in its stated strategy of reducing its exposure to high-cost, deep-level conventional mining, with a move to shallow, mechanised assets that are rich in palladium. On Monday 7 October the company announced that it was acquiring Canada's North American Palladium Limited (NAP) at a price tag of $758-million.

NAP has shallow operations north-west of Thunder Bay in the Canadian province of Ontario. There are still some regulatory hurdles but NAP's board has unanimously approved the transaction and will recommend that its shareholders support the deal.

The transaction, which will be funded through a combination of existing cash off the balance sheet, debt, and a metal repayment stemming from excess inventory, ticks a number of boxes for Implats. For one, it increases its profile for palladium, which has seen its price soar as diesel engines lose out to petrol engines amid rising emissions standards (palladium as a catalyst is mostly used in petrol or...

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