Sydney, Australia — MININGREVEW.COM — 28 September 2009 – Singapore-based international mining company OM Holdings Limited has agreed to buy a US$211 million (R1.6 billion) stake in a manganese project in South Africa from a group including Brian Gilbertson’s Pallinghurst Resources Limited, to supply Chinese markets.
In a statement to the Australian stock exchange released here, OM said it would sell 139.9 million shares to five investors for a 49% stake in the project. It would also pay R340 million in cash for a 20% stake in Ntsimbintle Mining (Pty) Limited “’ one of the five investors.
The US$200 million (R1.59 billion) Tshipi Kalahari Manganese project will increase OM’s capacity to supply to China, which consumes about half the world’s manganese, OM executives told reporters here. Gilbertson “’ a former chief executive officer of BHP Billiton Limited “’ will join OM’s board to lead a committee focusing on global investment opportunities, they added.
“This transaction represents the first major step towards our objective of increasing OM’s manganese ore resource base more than fivefold, and at the same time it begins the process of building a major steelmaking raw materials business,” OM said.
The Kalahari Basin project has the potential to produce between 2.2 million and 2.3 million metric tonnes of ore for 28 years, according to an initial study, the company revealed. Development may start next year, with first production targeted for 2013.
OM “’ which already supplies to China from its operations in Australia “’ also said it expected to resume the process of getting a secondary listing on the Hong Kong stock exchange. The company halted the plan last year because of global market conditions.
The remaining investors in the Pallinghurst group include Posco, South Korea’s biggest steelmaker, Investec Plc, AMCI Capital and NGP Midstream & Resources, the statement said. They would all obtain stakes in OM as part of the transaction.