Lonmin Plc/ Implats - Joint Announcement12 May 2004
Lonmin Plc/ Implats - Joint Announcement                                        
  Lonmin Plc                                                                      
  (Incorporated in the United Kingdom)                                            
  Share code : LON                                                                
  ISIN code : GB0031192486                                                        
  Impala Platinum Holdings Limited                                                
  (Incorporated in the Republic of South Africa)                                  
  Registration number: 1957/001979/06                                             
  Share code : IMP                                                                
  ISIN ZAE000003554                                                               
  A number of key milestones have been achieved including endorsement by the      
  Department of Minerals and Energy, participation by the Industrial Development  
  Corporation, the involvement of Historically Disadvantaged South Africans and   
  the obtaining of bank funding                                                   
  Sale of 27.1% of Lonplats by Implats                                            
  Implats to dispose of its entire 27.1% shareholding in Lonplats for cash;       
  9.0% for US$240.1 million directly to a number of consortia comprising          
  Historically Disadvantaged South Africans ("HDSA") ("HDSA Investors");          
  18.1% for a total of US$554.4 million to Lonmin; and                            
  Implats and Lonmin to provide a vendor-financing package of US$122.0 million for
  HDSA investors.                                                                 
  Purchase of 18% of Lonplats by Incwala Resources                                
  Lonmin to on-sell 9.0% of Lonplats to Incwala Resources (Pty) Ltd ("Incwala     
  Resources") - a newly formed company (to be HDSA controlled) - for US$240.1     
  million in cash;                                                                
  HDSA Investors to sell the 9.0% of Lonplats acquired from Implats to Incwala    
  Resources for US$240.1 million in cash, to be partly reinvested in Incwala      
  Resources equity;                                                               
  HDSA Investors will own more than 50% of Incwala Resources;                     
  Lonmin to invest a cash amount of US$90.3 million in Incwala Resources for      
  The Industrial Development Corporation of SA ("IDC") to make a direct equity    
  investment in Incwala Resources, of US$81.7 million in cash; and                
  Incwala Resources secures funding in the Rand equivalent of US$125.0 million    
  from a syndicate of banks.                                                      
  Department of Minerals and Energy Support                                       
  The South African Minister of Minerals and Energy supports the proposed         
  transaction and endorses it as a constructive approach to black economic        
  empowerment - within the requirements of the new Mining law                     
  On 18 September 2003, Lonmin and Implats announced that they had signed a non-  
  binding Memorandum of Understanding ("MOU") providing for the sale by Implats of
  its entire 27.1% holding in Western Platinum Ltd and Eastern Platinum Ltd,      
  Lonmin"s principal operating subsidiaries (together referred to as "Lonplats")  
  which would have the effect of ending Implats" joint control of Lonplats. Lonmin
  currently holds the balance of 72.9% of Lonplats.                               
  Significant progress has been made since the September announcement The         
  transaction has been restructured to facilitate the claim, on application for   
  conversion of mining rights, of equity ownership credits in terms of the Mining 
  Commenting on the transaction, the Minister for Minerals and Energy Ms. Phumzile
  Mlambo-Ngcuka said: "As presented, this transaction is in line with the         
  requirements of the new mining law.  The Department of Minerals and Energy will 
  at an appropriate time evaluate compliance with all aspects of the law; the     
  Scorecard and the Mining Charter, that is when the parties formally present     
  themselves for conversion to new order mining rights. It is at that stage that  
  any due credits for compliance will be formally awarded to the parties.  We wish
  the partners success in this business venture and the courage to face the       
  challenges that lie ahead.                                                      
  Lonmin and Impala have both facilitated this transaction and both will be       
  allocated credits that are proportional to the percentages and ounces they have 
  sold to their BEE partners.  We welcome the progress that has been made by all  
  the parties".                                                                   
  Sale by Implats of 9.0% of Lonplats to HDSA Investors                           
  HDSA Investors will acquire a 9.0% stake in Lonplats directly from Implats for  
  US$240.1 million in cash.  Funding for this acquisition will be facilitated as  
  HDSA Investors will contribute approximately US$61.1 million of their own-      
  sourced funding;                                                                
  US$57.0 million short term bridge finance; and                                  
  Lonmin and Implats will provide US$27.0 million and US$95.0 million of vendor-  
  financing respectively.                                                         
  Lonmin will indemnify Implats for its vendor-financing portion up to a cap of   
  US$95.0 million, in the event that the HDSAs are unable to repay the principal  
  amount of the loan on maturity. Given the strong cash flows of Lonplats, Lonmin 
  believes it is unlikely that this indemnity will be called.                     
  HDSA Investors will on-sell to Incwala Platinum (Pty) Ltd (Incwala Resources"   
  wholly-owned subsidiary, "Incwala Platinum") the entire 9.0% stake for a        
  matching consideration of US$240.1 million to be settled in cash.  The HDSA     
  Investors will use part of the consideration to repay the US$57.0 million of    
  bridge finance, and the balance to acquire shares in Incwala Resources.         
  Lonmin and Implats are in advanced discussions on the potential investment with 
  various broad-based HDSA consortia, which will between them purchase the 9.0%   
  stake in Lonplats from Implats and become the founding HDSA Investors in Incwala
  Resources as envisaged above.                                                   
  To date, three HDSA consortia have succeeded in securing strong financial       
  support for some US$30 million (corresponding to an investment of approximately 
  24.7% in Incwala Resources) towards the US$61.0 million of total funding        
  required for the HDSA investment in Incwala Resources.                          
  These three HDSA Investors are:                                                 
  Andisa Capital, a black empowerment financial services company headed by Saki   
  Macozoma (Chairman) and Ronnie Ntuli (Chief Executive);                         
  Dema Group, a women"s group, led by Zanele Mavuso Mbatha (MD);and               
  Vantage Capital, an empowerment group headed by Mutle Mogase.                   
  Further potential HDSA investors are working on obtaining the required own-     
  sourced funding in order to participate in the unique investment opportunity    
  represented by the balance of the controlling interest in Incwala Resources. The
  identities of further HDSA consortia will be announced upon the successful      
  completion of this exercise.                                                    
  Sale by Implats of its remaining 18.1% of Lonplats to Lonmin                    
  Lonmin will acquire 18.1% of Lonplats from Implats for US$534.4 million less an 
  amount equal to US$31.7 million, which is the amount of the dividend that       
  Lonplats has paid to Implats in respect of the last financial year ended 30     
  September 2003.  In addition, Lonmin will, simultaneously with the sale by      
  Implats to the HDSA investors, pay Implats US$20.0 million for facilitating the 
  transaction within this structure.  The net payment to Implats by Lonmin for the
  18.1% is therefore US$522.7 million.                                            
  From its newly acquired 18.1% shareholding in Lonplats, Lonmin will immediately 
  sell 9.0% directly to Incwala Platinum for US$240.1 million to be settled in    
  Following the completion of this transaction, Lonmin will have an 82.0% stake in
  Lonplats and Incwala Resources an 18.0% stake. Lonmin will also make a direct   
  equity investment in Incwala Resources of US$90.3 million in cash.              
  Introduction of the Industrial Development Corporation as a founding direct     
  equity investor                                                                 
  The IDC has approved a direct equity investment of US$81.7 million in Incwala   
  Resources. It is envisaged that the IDC and Lonmin will acquire an equal        
  shareholding in Incwala Resources.                                              
  This investment will represent a facilitation by the IDC of Black Economic      
  Empowerment in the platinum industry.                                           
  Incwala Resources - Funding and Capital Structure                               
  Incwala Resources is to be funded through a combination of equity and preference
  shares. It is currently envisaged that the funding (other than that to be       
  provided by the HDSA Investors) will be sourced as follows:                     
  A syndicate of banks will provide the Rand equivalent of US$125.0 million to    
  Incwala Platinum in the form of preference share funding with an expected term  
  of 7 years. The banks comprise: ABSA Bank Limited, Nedbank Limited, Standard    
  Chartered Bank Limited and The Standard Bank of South Africa Limited ; and      
  Lonmin and the IDC will subscribe for equal equity interests of approximately   
  23.6% each in Incwala Resources.                                                
  Provision is being made to accommodate the South African Women in Mining        
  Association, Lonplats employees by way of their Masikane Provident Fund and     
  communities in the vicinity of Lonplats operations by way of the Bapo Ba Mogale 
  community, to have an equity interest in Incwala. On completion, Incwala        
  Resources will be majority HDSA-owned and have majority HDSA Board              
  Incwala Resources intends to develop into a flagship for Black Economic         
  Empowerment in the South African diversified mining industry, enabling wide     
  spread participation by HDSAs in the mineral wealth of South Africa, and        
  ultimately seeking a listing on the JSE Securities Exchange South Africa.       
  Conditions to Completion                                                        
  Completion of the proposed transaction is subject to the following conditions:  
  The potential HDSA investors successfully obtaining the required amount of own- 
  sourced funds;                                                                  
  Signature of legally binding agreements between all the parties involved in the 
  The approval of Lonmin shareholders as required by the UK Listing Rules; and    
  The unconditional approval of the South African competition authorities and     
  other relevant regulatory authorities.                                          
  It is expected that the transaction will complete in the third quarter of 2004. 
  Further announcements will be made in due course.                               
  John Robinson, Chief Financial Officer                 +44 20 7201 6032         
  Ian Farmer, Director                                   +27 11 268 6318          
  CardewChancery                                    +44 207 930 0777              
  David Brown, Chief Financial Officer                   +27 11 481 3926          
  Cathie Markus, Executive Director                      +27 11 481 3925          
  Issued by sponsor: Deutsche Securities                                          
  Date: 12/05/2004 04:45:11 PM Produced by the JSE SENS Department