Statement re: Transaction

RNS Number:8974P
Lonmin PLC
18 September 2003

18 September 2003


           LONMIN AND IMPLATS AGREE TO END JOINT CONTROL OF LONPLATS
                   AND ON GROUND BREAKING EMPOWERMENT PROCESS

Introduction

Lonmin Plc ("Lonmin") announced today that it has signed a non binding
Memorandum of Understanding ("MoU") with Impala Platinum Holdings Ltd
("Implats") for the sale by Implats of its entire 27.1% holdings in Western
Platinum Ltd. and Eastern Platinum Ltd. (together referred to as "Lonplats").
Lonmin currently holds the balance of 72.9% of Lonplats, which is Lonmin's
principal operating subsidiary. This sale will simplify the holding structure of
both Implats and Lonmin and lays the foundation for a significant Black Economic
Empowerment (BEE) transaction in due course. The sale will also generate
substantial additional foreign direct investment by Lonmin in South Africa.

The key terms of the MoU are as follows:-

* Implats will dispose of its entire 27.1% holding in Lonplats for $800
million. The Principals' Agreement between Lonmin and Implats will terminate by
mutual agreement on completion of the transaction, thus ending joint control of
Lonplats, the restrictions relating to the introduction of new shareholders and
the change of control clause relating to Lonmin.

* Lonmin will acquire from Implats an interest of 9.1% of the issued
share capital of Lonplats, increasing its direct holding to 82%. The net cash
consideration will be approximately $242 million, calculated as $269 million
less the amount of Implats' right to a final Lonplats dividend for 2003,
estimated at $27 million.

* Lonmin and Implats will form a new jointly owned (50:50) company
("Newco") which will acquire from Implats 18% of the issued share capital of
Lonplats for a consideration of $531 million. Historically Disadvantaged South
Africans ("HDSA's") will be invited to acquire a controlling stake in Newco in a
process that will be facilitated by Lonmin and Implats and overseen by Lonmin.

* Newco will be funded through an initial equity capital contribution by
Lonmin and Implats of $115.5 million each. The balance of Newco's capital is
expected to comprise senior debt facilities, mezzanine finance and HDSA equity.
This is expected to be arranged by JP Morgan and Standard Bank of South Africa
Limited.

The Minister of the Department of Minerals and Energy, has been consulted and
welcomes the developments.

Black Economic Empowerment

It is intended that this transaction will pave the way for a very significant
BEE transaction in the platinum group metals ("PGM") sector that will enable
HDSA shareholders to acquire a direct, influential equity interest in a PGM
major. Lonplats is a world-class asset, with mine to market control of its
products and a low risk growth profile. It is cash generative and fully capable
of funding its growth programme, which is aimed at increasing production to one
million platinum ounces by 2008.

Lonmin and Implats intend initiating the empowerment process promptly. HDSA's
will be invited to subscribe for shares in the equity of Newco with a view to it
becoming controlled by HDSA's. Lonmin will oversee the formation of the Newco
board and the initial introduction of anchor HDSA shareholders and management.
Newco will have representation on the board of Lonplats. Lonmin expects that,
once Newco is controlled by HDSA's, Lonplats will have exceeded the phase one
scorecard requirements of the South African Mining Charter for HDSA ownership.
Real progress continues to be made in the other scorecard categories.

Lonmin's vision for Newco is that it will develop into a sustainable flagship
for BEE ambitions in the South African mining industry with robust assets and
sound growth prospects. In due course, Newco is expected to acquire other mining
assets and seek to qualify for a listing on the JSE Securities Exchange, further
expanding its broad base of HDSA shareholders who will benefit from the mineral
wealth of South Africa.

During the course of introducing HDSA's into Newco, the holdings of Lonmin and
Implats will be diluted. However, Lonmin expects to maintain an involvement in
Newco, possibly as a shareholder, as it develops into a mature and robust BEE
entity.

Financial Information

The pre-tax profits of Lonplats for the year ended 30 September 2002 amounted to
$327 million and the net assets of Lonplats at that date amounted to $638
million. The dividends declared by Lonplats in respect of that year, which were
attributable to Implat's 27.1% interest in Lonplats and were received by
Implats, amounted to $33 million.

Lonmin will acquire the 9.1% interest in Lonplats and will fund its equity
interest in Newco utilising existing senior debt facilities underwritten by
Lloyds TSB. Lonmin will initially account for its investment in Newco as a joint
venture.

The transaction is expected to be broadly neutral in terms of earnings in 2004
before the amortisation of goodwill. The gearing on the balance sheet will rise
significantly in the short term but it is anticipated that this will not affect
Lonmin's stated dividend policy.

Strategic Benefits

The strategic benefits to Lonmin are significant and include:-

* The removal of joint control of Lonplats and the change of control
provision in respect of Lonmin along with other restrictive elements of the
Principals' Agreement

* Consolidation of Lonmin's direct ownership of Lonplats at 82%

* The creation of an attractive platform for the future introduction of
broad based HDSA shareholders into Lonplats

* Participation as a shareholder in the anticipated prosperity of Newco

Conditions and Timetable

The parties will enter into the sale and purchase agreement when satisfactory
debt financing for Newco has been secured and once the parties have received
reasonable satisfaction from the Department of Minerals and Energy that Charter
Scorecard Credits in respect of units of production/ equity ownership will be
granted upon Newco becoming HDSA controlled.

The transactions in the shares in Lonplats and the formation of Newco are
conditional, inter alia, on the signing of legally binding agreements between
the parties, the approval of Lonmin shareholders (these transactions being
related party transactions under the UK Listing Rules), completion of the
financing of Newco and the approval of the South African competition authorities
and other relevant regulatory authorities.

Lonmin and Implats will work towards the signing of legally binding agreements
between them and Newco by 31 December 2003. The circular to Lonmin shareholders
seeking approval of the transaction and incorporating a Notice of Extraordinary
General Meeting, will be sent shortly after signing of the definitive
agreements. Subject to the satisfaction of the relevant conditions, completion
is expected to take place by 27 February 2004.

Morgan Stanley & Co. Limited and Cazenove & Co. Limited are acting as financial
advisors to Lonmin and Cazenove & Co. Limited are advising Lonmin in relation to
the financing arrangements for Newco.

A further announcement will be made in due course.

Sir John Craven, Chairman of Lonmin said,

"This transaction will consolidate Lonmin's position in Lonplats and end Implats
joint control of Lonplats, significantly enhancing Lonmin's strategic
flexibility."

"It is a substantial foreign investment in South Africa and also underlines
Lonmin's support and endorsement of the South African Government's BEE
initiative for the mining industry."

Ed Haslam, CEO of Lonmin said,

"With this transaction we will be taking the steps necessary to facilitate
compliance with Lonplats' BEE phase one equity credentials while ensuring Lonmin
shareholder value is protected. We are laying the foundations for a prosperous,
robust, broad-based BEE company, which will enable many HDSA's to benefit from
Lonplats' high quality cash generative platinum group metals assets."

Commenting on the announcement the Minister of Minerals and Energy, Ms Phumzile
Mlambo-Ngcuka:

"The said assets under consideration are amongst the best in SA and in the
world.

Successful conclusion of a deal with a BEE partner could be one of the biggest
transactions in the mining industry.

We welcome the steps undertaken by Impala and Lonmin and we are optimistic that
further discussions between the Department and the two companies will lead to
compliance with the requirements of the Broad-Based Socio-Economic Empowerment
Charter of the mining industry."

Lonmin and Implats will host a joint presentation with live link up between
Johannesburg and London scheduled at ( ) today. For details of the presentation
please contact:

Press Enquiries:

For Lonmin in London
Anthony Cardew/Clea Bourne                CardewChancery       [phone]

For Lonmin in Johannesburg
Jackie Range                              CardewChancery        [phone]

For Impala
Charmane Russell/ Janet Whitaker         Russell Associates     [phone]


Analyst Meeting:

An Analyst Meeting will be held today, 18 September 2003, in London at 14:00
(BST) and in Johannesburg at 15:00 (CAT):

London Analyst Meeting:
Cazenove
20 Moorgate
London EC2
[phone]

Johannesburg Analyst Meeting:
Sandton Sun and Towers
Jacaranda Room, Fifth Street
Sandhurst, Johannesburg
[phone]


            This press release is available on http://www.lonmin.com

Morgan Stanley & Co. Limited are acting for Lonmin and no one else in connection
with the proposed transactions and will not be responsible to anyone other than
Lonmin for providing the protections afforded to clients of Morgan Stanley & Co.
Limited or for providing advice in relation to such proposed transactions.


Cazenove & Co. Limited are acting for Lonmin and no one else in connection with
the proposed transactions and will not be responsible to anyone other than
Lonmin for providing the protections afforded to clients of Cazenove & Co.
Limited or for providing advice in relation to such proposed transactions.
Cazenove & Co. is authorised and regulated by the Financial Services Authority
and is a member of the London Stock Exchange.





                      This information is provided by RNS
            The company news service from the London Stock Exchange

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