OLD MUTUAL is poised to reopen negotiations with a tribal group over a sale of its £350m general insurance business in South Africa.

The London-listed life assurance and asset management group has appointed NM Rothschild to auction its 75% stake in Mutual & Federal, with first round bids expected imminently.

Royal Bafokeng Holdings (RBH), which has already held talks with Old Mutual this year, is thought to be among the frontrunners.

Mutual & Federal, which is listed in Johannesburg, announced a 66% fall in first-half profits after being hit by soaring commercial and industrial claims.

Old Mutual’s talks with RBH fell apart over price - Mutual & Federal’s valuation has plunged by more than a third since RBH first made an approach.

RBH is the investment arm of the 300,000-strong Bafokeng community, whose land sits on some of the world’s largest platinum deposits in the northwestern part of South Africa.

After a 1999 settlement, the community is entitled to 22% of royalties on all platinum mined from its ancestral lands. It has a 13% stake in Impala Platinum, the miner that is also listed in Johannesburg.

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