From The Globe and Mail

Even as one Canadian mining company is abandoning South Africa’s troubled platinum sector, two other Canadian miners are plunging ahead with ambitious plans here.

Vancouver-based Eastern Platinum Ltd. announced the sale of its South African assets to a little-known Chinese company for $225-million (U.S.) in cash, provoking surprise and skepticism from some analysts.

Last year, the company suspended its Crocodile River platinum project in South Africa because of what it called a “perfect storm” of labour unrest, rising costs and stagnant markets.

Eastplats announced on Friday that it is selling Crocodile River and all of its other South African assets to Hebei Zhongbo Platinum, a company that seems almost unknown. The Chinese company “has never been mentioned in the press or online (as far as we can tell) prior to this announcement,” said an analyst’s report from Raymond James Ltd. on Monday.

Chinese companies have been dramatically raising their stakes in South Africa’s platinum sector with several acquisitions as other companies give up. Earlier this year, South Africa suffered a devastating five-month strike by 70,000 platinum workers, the longest and costliest mining strike in the country’s history. One of its biggest producers, Anglo American Platinum, put two of its biggest mines up for sale after the strike.

Despite those woes, two other Canadian companies – Ivanhoe Mines Ltd.and Platinum Group Metals Ltd. – are pushing ahead with their projects in South Africa. Last week, Ivanhoe announced that it had received final approval from the South African government for its $1.6-billion Platreef project, one of the biggest platinum projects in the world.

Both companies say that their South African projects will be highly mechanized, reducing their operating costs and cutting their vulnerability to labour unrest. Ivanhoe says its project will be the lowest-cost platinum mine in Africa when it begins production in 2020.

The decision by Eastplats to sell its platinum assets, however, was big news in South Africa. “Strapped Eastplats throws in the towel,” said a front-page headline in Business Day, the country’s leading business newspaper.

Read more at The Globe and Mail