Johannesburg, March 13, 2007
— IFC, the private sector arm of the World Bank Group, today announced an agreement with Lonmin Plc to help the company expand and improve the development impact of its platinum mining operations in South Africa. The $150 million debt and equity package will be IFC’s largest investment to date in Sub-Saharan Africa.
IFC and Lonmin hope to empower the 350,000 people in the communities surrounding Lonmin’s operations in South Africa by opening up business opportunities. The goal is to build a long-term relationship with local communities and demonstrate the effects of sustainable development across Africa and worldwide.
“Our partnership with IFC will help to enhance Lonmin’s continued commitment to the long-term sustainability of our local communities and to allow us to build on our ongoing work to create mutually beneficial relationships with these communities,“ said Lonmin CEO Brad Mills.
Lonmin, a leading international platinum producer listed on the London Stock Exchange, has mining operations in South Africa and exploration underway elsewhere in Africa and Canada. It is at the forefront of its industry in working with local communities to enhance the long-term value of its business operations and to ensure wider distribution of benefits from mining. Up to $15 million of any IFC equity investment will be used for Lonmin’s community development initiatives.
IFC and Lonmin have jointly developed a local economic development program to support the communities surrounding Lonmin’s operations. IFC will provide advisory services in four areas that draw on its global expertise and that will contribute to a stronger development impact for Lonmin’s mining operations. Efforts will include helping Lonmin implement a Black Economic Empowerment supplier development program; supporting Lonmin’s HIV/AIDS programs by drawing on IFC’s experience with programs elsewhere in mining and other sectors; contributing to Lonmin’s effort to integrate women into its workforce to ensure a broader, more equitable participation in the company’s success; and assisting Lonmin with local stakeholder dialogue and increasing the capacity to plan and implement community development projects.
IFC will provide a $100 million standby senior loan over 10 years, with a grace period of up to seven years. In addition, IFC may buy shares in Lonmin Plc worth up to $50 million.
“We look forward to working with Lonmin and its stakeholders toward encouraging community development,” said Rashad Kaldany, IFC Director of Oil, Gas, Mining, and Chemicals. “IFC and Lonmin share the objective of maximizing the benefits from mining operations to help improve people’s lives in Africa.”
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org
or
www.ifc.org/africa
.
About Lonmin
Lonmin is the third-largest and lowest-cost primary platinum producer in the world. Headquartered in London with operations based in South Africa, the company is listed on the London and Johannesburg stock exchanges. In the financial year through September 2006, Lonmin produced over 1 million ounces of platinum in concentrate, with sales of over 950,000 ounces of platinum. In October 2006, Lonmin became the first platinum major to convert its old order South African mining rights into new order mining rights in respect of its Marikana operations.
