A subsidiary of South Korean steel firm Posco has acquired an 11.36% stake in a South African manganese project for $34.3-million, and negotiated an offtake agreement.
Pallinghurst Resources is one of the Pallinghurst co-investors, which owns Tshipi e Ntle Manganese Mining, together with black economic-empowerment group Ntsimbintle Mining.
Pallinghurst said on Thursday that its share of the disposal consideration would be $6.9-million.
Chairperson Brian Gilbertson said the transaction could be seen as a vote of confidence in the manganese project from one of the world’s leading steel companies.
Manganese is a key raw material mainly used in the production of steel. Pallinghurst said that the inclusion of Posco as a Tshipi partner would allow the Tshipi project to benefit from the South Korean steel company’s technical capability and experience.
Posco has also negotiated the right to an off-take agreement, once the mine enters production.
Posco would buy a minimum of 11% and a maximum of 20% of the total manganese ore production from Tshipi each year, at market-related prices.
“For South Africa, this is an important transaction, since this direct investment into the resources space shows international investor confidence and is set to create new jobs,” Gilbertson said in a statement.
The transaction is subject to the award of a mining permit to the Tshipi project.
Source: Mining Weekly
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