Palabora Mining Company (Palabora)  has issued an update on Rio Tinto as well as Anglo American Divestment, a change In Directorate, and an update to its Cautionary Announcement.

Rio Tinto and Anglo American divestment

Shareholders of Palabora are referred to the announcements published on the Stock Exchange News Service of the JSE Limited (SENS) on 11 December 2012 and 28 December 2012, and the renewal of/update to cautionary announcements published on 12 February 2013, 27 March 2013, 13 May 2013, 1 July 2013, 5 July 2013 and 18 July 2013 (Cautionary Announcements), regarding the conclusion of the Rio/Anglo Sale Agreement between Rio Tinto, Anglo American and a consortium of purchasers comprising South African and Chinese entities led by the Industrial Development Corporation of South Africa SOC Limited and Hebei Iron & Steel Group Co. Ltd. (Consortium).

Shareholders are advised that the Rio Tinto and Anglo American Divestment was implemented on 31 July 2013. This has resulted in the Consortium acquiring, directly and indirectly, 74.5% of the issued share capital of the company.

As a result, and as previously advised, the Consortium is required to extend an offer to all remaining Shareholders to acquire their ordinary shares in Palabora (Mandatory Offer), which offer Shareholders may accept as to all or a portion of their Palabora ordinary shares. It is Palabora’s understanding that an announcement by the Consortium of its firm intention to make such Mandatory Offer will be made on 1 August 2013. Pursuant to the Mandatory Offer, and subject to and in accordance with the requirements of the Companies Act, 71 of 2008, as amended, and the Fundamental Transactions and Takeover Regulations contained in Chapter 5

of the Companies Regulations, 2011, as amended (Companies Regulations), Palabora understands that Shareholders are to be offered a consideration of

ZAR110 per Share, plus an additional ZAR5.95 per Share, being a non-compounding escalation amount of 5% per annum calculated over the period from 1 July 2012 up to, but excluding, the closing date of the Rio Tinto and Anglo American Divestment, being 31 July 2013.

Note that this announcement by Palabora does not constitute the firm intention announcement in respect of the Mandatory Offer required to be made by the Consortium in accordance with Regulation 101(1) of the Companies Regulations.

Changes in Directorate

In compliance with paragraph 3.59 of the JSE Limited Listings Requirements, the board of directors of Palabora (Board) advises Shareholders that the following changes to the composition of the Board have taken place:

–       Pursuant to the implementation of the Rio Tinto and Anglo American Divestment, with effect from 31 July 2013, Craig Kinnell, Jean-Sabastien Jacques (and his alternate, Eric Yan), Hendrick Faul (all non-executive directors) and the MD, Anthony Lennox, have resigned.

The Board would like to thank the outgoing directors for their valuable contribution and, in particular, Lennox for guiding Palabora through the Lift II order of magnitude and pre-feasibility studies, magnetite growth, smelter study and the vermiculite business.

The Board is pleased to announce the appointment of the following directors and alternate directors on 31 July 2013:

–       Jinghua Han, appointed to the Board as a non-executive, non-independent director. He is the Vice President of Chengde Iron & Steel Group Co. Ltd, a subsidiary of Hebei Iron & Steel Group Co. Ltd. (HBIS).

–       Jie Yan, appointed to the Board as a non-executive, non-independent director. He is the Director General of Enterprise Management Division of Tewoo Group, the largest state owned enterprise in the Tianjin Municipality in China.

–       Zejun Tian appointed to the Board as a non-executive, non-independent alternate director to Mr Han. He is the General Manager of Hebei Iron & Steel Group International Trade Corporation, based in Beijing.

–       Ng Tze For (Benjamin) appointed to the Board as a non-executive, non-independent alternate director to Mr Yan. He is the Chief Financial Officer of General Nice Development Company.

Abel Patrick Malinga appointed to the Board as a non-executive, non-independent director. He is the Divisional Executive of Mining and Manufacturing Industries at the Industrial Development Corporation (IDC).

George Maanda Negota is appointed to the Board as a non-executive, non-independent director. He previously served as independent non executive director of Palabora from May 1998 and in February 2007 was appointed as Chairman of the Board until 2009. He is one of the shareholders in Palabora BEE Investment Company (RF) Proprietary Limited, which will hold a 6% shareholding in Palabora Copper Proprietary Limited (Palabora Copper), Palabora’s operating subsidiary), upon the anticipated implementation of Palabora’s BBBEE transaction on 1 August 2013.

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