9th Jun 2015 06:40
LONDON (Alliance News) - South32 Ltd Tuesday said it has decided to delay restarting three of the four high-carbon ferromaganese furnaces at its joint venture operation in South Africa with fellow mining giant Anglo American PLC.
South32, a recently created spin-off company from FTSE-100 giant BHP Billiton PLC, said it made the decision to delay the restart of the furnaces at the South African Samancor manganese joint venture due to the decline in high-carbon ferromanganese prices, which have continued to decline in 2015.
The Samancor manganese joint venture is owned 40% by South32 and 60% by Anglo American and operates operations in South Africa and Australia. Back in August, before the spin off of South32, BHP Billiton agreed with Anglo American that there would be certain changes to the joint venture.
"The decision follows a decline in ferromanganese alloy prices of approximately 20% since the start of the 2015 financial year and is aligned with South32's commitment to maximise per share financial performance, rather than volume. No permanent employees will be retrenched as a result of this temporary suspension," South32 said in a statement.
As a result, South32 and its joint venture partner are holding negotiations to secure access to the necessary rail and port capacity required to export additional manganese ore from its operations in South Africa. Although the ore will be exported out to be treated, the amount will "remain dependent on market conditions", said South32.
In addition, the company is reviewing the fair value of its interest in the Samancor joint venture. South32 said the review is expected to have implications for the fair-value adjustments required under the umbrella agreement which governs the joint venture.
By Joshua Warner; [email protected]; @JoshAlliance
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