Notes to the Consolidated and Separate Annual Financial Statements | Note 41

Through its wholly-owned subsidiary, Merafe Ferrochrome, the Group agreed with GOSA to acquire a participation interest in the Eastern PGM Plants located at Thorncliffe mine. The new joint operation relates to all associated minerals produced pursuant to the Eastern Mining Right and is incorporated into the PSV in terms of the PSV agreement. The acquisition of the Eastern PGM operation was part of the Group's growth strategy. Joint control was obtained in accordance with the PSV agreement.

Effective 6 September 2023, the new joint operation consists of an Eastern PGM Plant and a second plant (PGM X) that will treat PGM-bearing materials to extract and produce PGMs concentrate. The PGM East plant is classified as a business combination as defined by IFRS 3, and the values for the assets acquired and liabilities assumed approximate fair value at the acquisition date. Merafe Ferrochrome acquired the assets and liabilities of PGM X, which is under construction at book value.

No consideration was paid by Merafe Ferrochrome for the purchase of the Eastern PGM operation. As a result, and in terms of IFRS 3 Business Combinations, a gain on acquiring a joint operation for R250m was recognised in the statement of profit or loss and other comprehensive income.

Merafe Ferrochrome incurred acquisition-related costs of R0.8m, comprising of advisory and legal expenses. These costs are included in other expenses (note 20).