SOUTH32 will not complete the sale of its Metalloys manganese alloy smelter in South Africa after the buyer Satka Investments “failed to satisfy certain commercial conditions to the agreement”, the group said.
“Production at Metalloys ceased in March 2020 and the site is expected to remain on care and maintenance as we assess future options for the smelter,” it added today in a statement to the JSE.
Metalloys is owned by the Samancor Manganese Joint Venture which is 60:40 owned with Anglo American. The joint venture holds ownership interests in the Mamatwan and Wessels manganese mines in South Africa’s Northern Cape province.
At one million tons a year in installed capacity, Metalloys is among the largest manganese alloy producers globally. However, above-inflation electricity price increases by Eskom, the South African government owned utility, has helped make the operation unviable. A $109m impairment was booked against the asset before being put into mothballs.
Samancor Manganese reported record production in South32’s six months ended December in which taxed profit came in at $1.03bn compared to $53m in profits for the interim period in the previous financial year.
The group declared a $405m fully franked interim dividend.
“Our business is in excellent financial health and we have continued to reshape our portfolio, with the planned acquisition of a 45% stake in the Sierra Gorda copper mine, and further investment in green aluminium,” said Graham Kerr, CEO of South32, in a commentary to group’s results, published in February.