Ruukki Group Oyj, the Finnish investment group, plans to buy platinum assets and may sell shares to investors in South Africa next year to fund acquisitions.
“We are actively pursuing discussions with several players,” Alwyn Smit, Espoo-based Ruukki’s chief executive officer, said in an interview yesterday. “We may well consider a capital raising next year when we list.”
Ruukki is spinning off its wood businesses to focus on natural resources. Many of its assets will be in South Africa, where the company plans a secondary listing in the first half next year, Smit said.
Ruukki is already buying South African ferrochrome producer Mogale Alloys Ltd. and part of that plant could be converted to process platinum ore, Smit said. South Africa is the largest producer of platinum, used in jewelry and autocatalysts.
“We’re looking for investments that will be cash generative in the relatively near term, and in the current market circumstances,” Smit said. “It’s a good time for us to be looking around,” he said, adding that several smaller mining companies are currently “struggling.”
While Ruukki, about 30 percent-owned by Kermas Ltd., has funds and no debt, an acquisition may trigger a capital increase, Smit said. The company may also consider other acquisitions in ferrochrome and nickel, both used in stainless steel.
Ruukki will boost chrome-ore production capacity at its Turkish operation by about 75 percent to 70,000 metric tons a year after last week approving a project to extract the metal from waste rock, Smit said. The plant would take nine or 10 months to build and production costs would be less than half current levels, he said.
Source: Bloomberg
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