MB 29th INTL FERRO-ALLOYS CONF: BHP abandons Temco sale

BHP Billiton has abandoned the attempted sale of its Tasmanian Electro Metallurgical Company (Temco) plant, the company has confirmed.

BHP Billiton abandoned the attempted sale of its Tasmanian Electro Metallurgical Company (Temco) plant about a month ago, the company confirmed.
“A process was launched following the restart to invite interested parties to make proposals regarding the potential divestment of Temco. Despite substantial interest, no party was able to make an offer that met BHP Billiton’s requirements in terms of value or terms and conditions. Accordingly, the process has been suspended and focus will now be solely on ensuring the safe and long term sustainability of the operation,” a BHP spokeswoman told Metal Bulletin.

“BHP Billiton will continue to review the operations within its portfolio and Temco will be treated like any other operation in that it will need to be viable as a stand-alone operation,” the company added .

The miner appointed Citibank to handle the sale of the manganese alloys plant last year, following months of speculation about the future of its manganese unit.

It had at least ten bidders for the asset when the second round of bidding started in January, Metal Bulletin reported at the time.

But it struggled to find a suitable buyer amid poor market conditions for manganese alloys, according to several delegates at Metal Bulletin’s 29th International Ferro-alloys conference in Barcelona.

“The sale is off; it’s not a good time to try to sell a manganese alloys plant,” one source told Metal Bulletin on the sidelines on the conference.

The future of BHP’s manganese division remains a hot topic amid rumours that the company has appointed a large investment bank to handle the sale of the entire division.

Still, some sources said BHP is only planning to sell its South African assets.

It is unclear as to whether BHP is actively pushing a sale of the assets or whether banks are acting independently to generate potential interest, sources said.

BHP declined to comment on the potential sale of some or all of these assets.

“Several banks have approached us in the past year asking if we would be interested in buying BHP manganese assets,” a second market source told Metal Bulletin.

“I have heard just about every investment bank’s name associated with this a potential sale of BHP’s manganese assets,”a third source said.

Banks have been trying to educate themselves about the manganese market in recent months, a fourth source told Metal Bulletin on the conference sidelines.

“Banks have been calling manganese producers in the last few months asking the kind of questions they would not normally ask and showing interest in this market, which they would not normally focus on,” the source said.

BHP’s manganese ore and alloys assets are located in South Africa and Australia and are held through a 60% holding in Samancor Manganese, in which Anglo American holds the remaining 40%.

The Australian assets comprise Groote Eylandt Mining Company (Gemco), which accounts for more than 15% of global high-grade manganese ore production, and Temco, which produces high-carbon ferro-manganese, silico-manganese and sinter.

In South Africa, BHP also has Wessels, an underground manganese ore mine and Mamatwan, an opencast ore project.

It operates Metalloys in Meyerton, South Africa which produces high- and medium-carbon ferro-manganese and silico-manganese.

Temco has nominal capacity for 130,000 tonnes of high carbon ferro-manganese, 125,000 tonnes of silico-manganese and 350,000 tonnes of sinter.

Janie Davies
Twitter: @janiedavies_mb