Australian diversified miner South 32 Ltd said on Thursday it would sell its entire stake in manganese alloy smelter Tasmanian Electro Metallurgical Company (TEMCO) to UK-based conglomerate GFG Alliance.
GFG will acquire 100% of the shares in TEMCO for a nominal amount once approval is received from Australia’s foreign investment review board, South 32 said in a statement, but did not elaborate on the financial details.
South32, the world’s largest producer of manganese ore, had been looking at selling or closing TEMCO, as falling prices of manganese due to the coronavirus crisis had lowered the smelter’s economic viability.
The miner in July had forecast an impairment charge of about $109 million in its full year 2020 financial results in consideration of its continuing review of its TEMCO and Metalloys smelters.
TEMCO, located in Bell Bay, Tasmania, is run by the Samancor Manganese Joint Venture (JV), which is owned 60% by South32 and 40% by Anglo American Plc.
As a condition to the completion of the transaction, TEMCO and the Samancor Manganese JV entered into an agreement for the JV to supply ore to the smelter.
“Today’s agreement follows an extensive review of options regarding the future of our manganese alloy business,” South32 Chief Executive Officer Graham Kerr said.
“The transaction and our ongoing supply of ore to TEMCO will see the smelter…continue to operate into the future.”
The disposal transaction does not include the Samancor Manganese JV’s South African manganese alloy smelter, Metalloys, which has separately been placed under care and maintenance, South32 said.
Source: Reuters.com