The Ruukki group of Finland has announced plans for a further expansion of its South African minerals interests through a R2.9 billion merger with Australia and London-listed Sylvania Resources, which has South African processing and exploration operations.
Ruukki says the merger will create an integrated mine to metals platinum group metals (PGM) and ferrochrome company. The merged company will retain the Ruukki Group plc name.
In May Ruukki announced the R2 billion acquisition of Mogale Alloys in Krugersdorp. It said then that it is looking for further investments in South African minerals.
Sylvania is a PGM producer with tailings retreatment operations and shallow mining exploration interests located in South Africa’s PGM rich Bushveld Complex.
Sylvania’s assets comprise a 74% interest in Sylvania Metals (Pty) Limited, which treats chrome tailings from Samancor Chrome’s mines on the western and eastern limbs of the Bushveld Complex; a 25% interest in a chrome tailings retreatment project at Kroondal on the western limb of Bushveld Complex, managed by Aquarius Platinum; and an exploration project on the eastern limb of the Bushveld Complex.
Alwyn Smit, CEO of Ruukki comments on the strategic rationale of the Sylvania transaction, saying, “This transaction, following on from our recent acquisition of 84.9% of Mogale Alloys, represents a very significant step towards the realisation of our strategy to develop a fully integrated mine to metals PGM and ferrochrome business.”
In addition, Ruukki anticipates that the enlarged group may, through the conversion of existing furnaces, accelerate the development of independent PGM smelting capacity, thereby relieving the bottleneck to growth in the emerging PGM sector.
Ruukki’s acquisition of Mogale provides the enlarged group with access to production facilities including DC arc furnaces which, when combined with Sylvania’s existing resources, tailings recovery processing and retreatment operations will enable vertical integration and synergies.
The enlarged group will initially source feed from the tailings reprocessing operations operated by Sylvania and will seek to secure future sources of feed from Ruukki’s existing Platreef deposits.