Ruukki South Africa, the South African subsidiary of Finnish industrial refining group Ruukki, has acquired an 84,9% stake in Mogale Alloys, in Krugersdorp, from JSE-listed commodities trading company Metmar for about R2-billion, it announced on Monday.
The subsidiary was planning to make further investments in South African minerals and metals operations, it noted in a statement, adding that it was particularly interested in minerals and alloys, with a focus on chrome and platinum processing.
The group, which was listed on the NasdaqOMX Helsinki, was also planning to make a secondary listing on the JSE during 2010, following the acquisition of South African interests, it said in a statement.
Black economic-empowerment partners would own the balance of Ruukki SA, which has been headed by CEO Alwyn Smit since 2008.
Of the purchase amount, R1,2-billion was payable immediately, with R1,125-billion going to the vendors and a further R75-million being paid into the Mogale Management Trust over five years.
The remaining R800-million would be financed by the vendors with R200-million to be repaid after a year and R600-million to be repaid over the next five years.
Mogale has four smelting furnaces and produces silico manganese, ferrochrome and stainless steel alloy, with a combined capacity of 100 000 t/y.
Smit said the Mogale acquisition was an ideal opportunity for Ruukki, both as a ferrochrome operation and as a base from which Ruukki could expand into platinum and other metals processing.
“As demand recovers, ferrochrome market prices are expected to outperform other minerals, owing to limited supply and growing demand. The Mogale transaction expands and diversifies Ruukki’s current Turkish and German minerals capabilities of special grade ferrochrome, and gives opportunities to utilise existing sales channels,” he commented.
Source: Mining Weekly
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