| |
Mmakau to buy 15% Hernic stake
David McKay
Posted: Thu, 20 Oct 2005
[miningmx.com] -- MMAKAU Mining, the unlisted firm headed by Bridgette Radebe, is leading a consortium that will take a 15% stake in Hernic Ferrochrome, the world’s fourth largest ferrochrome producer.
Mmakau Mining will join forces with Matlapeng, a contracting firm that operates at Hernic’s Brits-based plant, and a broad-based womens’ group. Colin Bain, Hernic CEO, was unable to comment on the speculation, but it’s thought the transaction is being put through the minerals and energy department. An announcement is imminent.
It now means that Mmakau has an interesting mix of diverse investments which include a 10% stake in the R1.5bn Marula platinum mine, a 26% stake in mining services company, Shaft Sinkers, as well as a partnership with Total Coal SA.
Bridgette’s backer is Gerard Kemp, head of new business at RMB Resources and who was the glue in the empire Patrice
Motsepe put together from the 1990s.
Speaking at the SAMDA mining conference in September, Kemp declared his interest in building “... Mmakau as a major new business in the mining sector”.
There are less and less reasons why Bridgette Radebe shouldn’t list Mmakau. In fact, listing may become necessary if Mmakau is to fund an acceleration in its growth which currently stacks up like an equity investment company rather than an operator, a similar situation in which Mvelaphanda Resources finds itself.
Mmakau, founded in 1995, will now have a piece of the 420,000 ton/year Hernic. In 2004, Scandanavian mining firm, Outokumpu joined forces with Hernic to build the company’s output to its current level.
Ferrochrome is an interesting but sometime precarious business given steep ups and downs in world prices, most of which are negotiated quarterly. Prices reached their highest level in ten years earlier this year of some $0.72 to $0.74c/lb. This compares
to $0.27-$0.29c/lb in early 2002, the lowest level in 30 years when some 1.3 million tons/year of ferrochrome capacity was idled.
Ferrochrome is beneficiated into chrome to provide stainless steel with its anti-corrosive properties. As a result, its fortunes ride on industrial demand growth in new centres such as China and India. Chinese output of stainless steel is expected to rise to 6 million tons in 2008 from 1.8 million tons in 2003, according to Research and Markets.
| |
