13th Mar 2007 09:00
Lonmin PLC13 March 2007 Lonmin is pleased to announce it has signed a ground breaking partnership withthe International Finance Corporation (IFC) to facilitate sustainable communitydevelopment and black economic empowerment (BEE) in South Africa. The partnership breaks into three parts: • A stand by debt facility of US$100 million which can be used to facilitate BEE participation in Lonmin's projects in South Africa; • An option for the IFC to invest up to US$50 million in Lonmin equity of which Lonmin has committed to use the first US$15 million to fund local community projects around its South African operations; and • A joint Lonmin and IFC US$5.9 million Technical Assistance and Advisory Services Programme covering BEE Supplier Development, Gender Mainstreaming, HIV/AIDS Prevention and Community Development Programme. Commenting on the partnership, Chief Executive Brad Mills said: "This innovative partnership reflects Lonmin's continued commitment to the longterm sustainablity of the communities impacted by our operations and our strongsupport for the ongoing development of black economic empowerment in SouthAfrica. This programme will ensure a substantial direct investment in our localcommunities which, in partnership with these communities, will be utilised todeliver real improvements to community wellness. We are delighted to have theassistance and technical expertise of the IFC in this area and look forward toworking closely with them in the future." Enquiries: Alex Shorland-Ball +44 (0)20 7201 6060 Vice President, Investor Relations & Communications The Lonmin IFC partnership is structured as follows: Stand By Debt Facility The IFC has agreed to provide a US$100 million standby loan facility to WesternPlatinum Limited, a subsidiary of Lonmin. This facility is available tofacilitate the participation of any BEE partner selected by Lonmin in any Lonminproject. In addition the facility can be drawn down to fund any of Lonmin'scurrent or future expansion projects. The loan will be repayable in 6 equalinstalments with the first due 7 years after first draw down and will attractinterest at 1.5% above LIBOR. Equity Investment Lonmin has granted the IFC an option to acquire new Lonmin shares up to a valueof US$50 million. Lonmin will issue new shares to the IFC following exercise ofthe option at a discount of 5% to the market price prevailing on the LondonStock Exchange at the time of exercise. The option is exercisable at the IFC'sdiscretion and can be exercised in tranches of a minimum of US$10 million. Theoption remains valid for 2 years from today's date. Lonmin has committed to invest the first US$15 million received from the IFCunder the equity option in community projects to benefit the communities whichhost Lonmin's operations in South Africa. Technical Assistance and Advisory Services Programme Lonmin and the IFC will design and implement a three year comprehensiveTechnical Assistance and Advisory Services Programme in support of Lonmin'ssustainable community development programme for the communities on and aroundLonmin's operations in South Africa. This Programme will also support Lonmin'songoing commitments in its Social and Labour Plans. The total cost of thisProgramme will be around US$5.9 million and will be split equally between Lonminand the IFC. The Technical Assistance and Advisory Services Programme splits into four areas: •BEE Supplier Development The IFC will partner with Lonmin to implement a supplier development programme.This programme will aim to expand Lonmin's BEE and local supplier base byidentifying new suppliers, increase the competitiveness of BEE companies throughtraining and capacity building and broker involvement and co-operation withother regional mining operators and/or industry clusters to catalyse small andmedium sized enterprise (including BEE) development in North West Province andfacilitate supplier access to finance. •Gender Mainstreaming The IFC will assist Lonmin with the fine-tuning of its gender mainstreamingstrategy and help implement mechanisms for the increased participation offemales within Lonmin's operations. •HIV/AIDS Lonmin and the IFC will work together to jointly design and implementcomprehensive HIV/AIDS prevention programmes to enhance the existing programmesoperated by Lonmin. •Community Development Programme The IFC will help Lonmin to facilitate local stakeholder dialogue and assistlocal stakeholders, particularly assisting Lonmin to further develop its workingpartnerships with local municipalities and tribal authorities to increase thecapacity to effectively plan and implement community development projects. END Notes to Editors IFC, the private sector arm of the World Bank Group, promotes open andcompetitive markets in developing countries. IFC supports sustainable privatesector companies and other partners in generating productive jobs and deliveringbasic services, so that people have opportunities to escape poverty and improvetheir lives. Through FY06, IFC Financial Products has committed more than $56billion in funding for private sector investments and mobilized an additional$25 billion in syndications for 3,531 companies in 140 developing countries. IFCAdvisory Services and donor partners have provided more than $1 billion inprogram support to build small enterprises, to accelerate private participationin infrastructure, to improve the business enabling environment, to increaseaccess to finance, and to strengthen environmental and social sustainability.For more information, please visit www.ifc.org. 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