South African platinum developer Wesizwe Platinum announced in late May 2010 it had agreed to exchange a 51% interest in the company to a Chinese consortium, consisting of Jinchuan Group Ltd. and the China-Africa Development Fund (CADF), for total financing of Wesizwe’s Frischgewaagd- Ledig project on the western limb of South Africa’s Bushveld Complex. Capital funding to develop the project is estimated at $824.5 million.
Jinchuan will purchase all of the platinum group metals (PGMs) concentrate produced by the project under a long-term off-take agreement. The project is being planned to produce 350,000 oz/y of PGMs in concentrate over a period of 35 years. The Jinchuan/CADF investment in Wesizwe represents China’s first direct investment in African platinum.
The transaction calls for Jinchuan/CADF to subscribe for $227 million in ordinary shares of Wesizwe, representing a 51% interest in the company, and to provide project financing totaling $650 million to support development of the project. In the event of any funding shortfall, Jinchuan will cover additional financing required to bring the project to full steady-state production.