The loan came at against the backdrop of an expected increase in platinum demand among China’s middle class with some major mining companies like Anglo American thinking of closing their shafts due to soaring costs.
The Chinese consortium has Jinchuan Group – China’s largest nickel and platinum group metal producer – and China-Africa Development Fund as some of its major shareholder.
The credit committee of the China Development Bank has already approved the $650m loan central to the transaction while the finalisation of the funding would be in “the next couple of months”.
There is still outstanding paperwork, finalising conditions precedent and signing of the physical agreement.
“Given all the chaos in the sector subsequent to that transaction, we are heartened that they have come through and expressed support for the project and the Wesizwe development plan,” Wesizwe chief operating officer Paul Smith said.
The funding for Wesizwe was part of a deal struck when a consortium of Chinese investors agreed in 2010 to an $877 million investment to acquire a stake in the company.
The company said last year that the capital cost of Bakubung would increase 1.4 billion rand ($158 million) to 7.9 billion rand ($893 million).
Main commissioning of the mine is scheduled for 2018 and it is expected to operate at a nameplate capacity of 325,000 ounces of platinum group metals by 2023.
The planned mine is near the city of Rustenburg where Anglo unit Anglo American Platinum last week unveiled plans to close two mines and cut up to 14,000 jobs inorder to restore profits, Reuters reported.