ArcelorMittal to offload entire stake in South African manganese joint venture

ArcelorMittal to offload entire stake in South African manganese joint venture

China National News



• Kalagadi Manganese is a South African manganese player engaging in the exploration and production of manganese in the Kalahari Manganese basin

• Mashile-Nkosi, or her nominee which might be a consortium consisting of some of the existing Kalahari Resources shareholders would acquire ArcelorMittal's 50% Kalagadi shareholding for 3.9-bn rand cash

• The announcement follows a South Gauteng High Court ruling in June, which gave ArcelorMittal ten days to meet its 241.3-mn rand Kalagadi shareholders agreement
LUXEMBOURG/JOHANNESBURG - ArcelorMittal, the world's largest steelmaker, has entered into an agreement with the chairwoman of joint venture partner Kalahari Resources to sell its 50 per cent stake in South African miner Kalagadi Manganese for 3.9 billion rand ($447-million)
.
Kalagadi Manganese is a South African manganese player engaging in the exploration and production of manganese in the Kalahari Manganese basin, Northern Cape Province, South Africa.

In a joint announcement ArcelorMittal and Daphne Mashile-Nkosi, chairwoman of Kalahari Resources, said that a definitive agreement has been reached for a cash deal whereby the global steel giant will receive a cash consideration of not less than R3.9 billion (approximately $447 million), on closing of a sale and purchase agreement ("SPA").

The SPA was executed on 14 November 2012,
ArcelorMittal said on Thursday that Mashile-Nkosi, or her nominee which might be a consortium consisting of some of the existing Kalahari Resources shareholders would acquire ArcelorMittal's 50% Kalagadi shareholding for R3.9-billion ($447-million) cash.

The announcement follows a South Gauteng High Court ruling in June, which gave ArcelorMittal ten days to meet its R241.3-million Kalagadi shareholders agreement, reported .Mining Weekly Online.
In early 2008 Mining Weekly Online reported that ArcelorMittal had paid $432.5-million for its Kalagadi interest.

In May this year, Kalahari Resources had requested the South Gauteng High Court to ensure that ArcelorMittal honoured its shareholder agreement obligations, after the steelmaker had failed to settle the matter out of court.

The bone of contention was the delay in the implementation of an oft-publicised 320 000 t/y high-carbon ferromanganese smelter at Coega in the Eastern Cape has stalled Kalagadi's plans for a manganese mine and sinter plant, in Hotazel, in the Northern Cape.

The plan, as told to Mining Weekly Online during a site visit, was for the three-million tons of ore a year to serve as the feedstock for the production of 2.4-million tons a year of sinter, of which 1.7-million tons a year (t/y) would be marketed and 700,000 t/y smelted into 320,000 t/y of high-carbon ferro-manganese.

The website was told at the time that the IDC was keen to promote optimum utilization, hence the smelting aspiration. The ArcelorMittal had secured an offtake agreement of 850,000 t/y.
With a presence in more than 60 countries, ArcelorMittal is the leader in all major global carbon steel markets, including automotive, construction, household appliances and packaging, with leading RD and technology. The group also has a world class mining business with a global portfolio of over 20 mines in operation and development, and is the world's 4th largest iron ore producer.
In 2011, ArcelorMittal had revenues of $94.0 billion and crude steel production of 91.9 million tonnes, representing approximately 6 per cent of world steel output. The group's mining operations produced 54 million tonnes of iron ore and 8 million tonnes of metallurgical coal.

The proposed sale transaction will be subject to financing arrangements and will require shareholders, corporate and various other regulatory approvals

On completion of the transaction, Kalahari Resources will hold 40% interest in Kalagadi Manganese, Mashile-Nkosi, or her nominee, will hold 50% with the remaining 10% interest held by the Industrial Development Corporation of South Africa Limited.

Kalahari Resources was started with the injection of R12 million by Daphne Mashile Nkosi, Executive Chairperson, into the project to complete the pre-feasibility study.
Founded in 2001, it is a majority black-owned company in which women occupy the top positions, according to a new mining legislation that gave historically disadvantaged individuals the opportunity to participate in the mainstream economy.

The company's equity is held by more than nine companies, which brings together a range of women groups, entrepreneurs and beneficiaries.
This company was established with the intention of gaining access to manganese resources in the Kalahari Manganese Basin. This was achieved in 2005 when the company was granted a license to prospect for manganese in the Kalahari Basin, specifically on the farms Gama, Olivepan and Umtu.

- See more at: http://www.chinanationalnews.com/index.php/sid/210750779/scat/3a8a80d6f705f8cc#sthash.UBs1Bru2.dpuf