Mineral Resources (MinRes) has agreed to transfer its manganese assets to Resources Development Group (RDG) in exchange for a 75 per cent shareholding in RDG.
The manganese assets include mining leases in Ant Hill and Sunday Hill, both located south-east of Nullagine in Western Australia.
Manganese is a non-core business for Mineral Resources. The company has a diversified commodity portfolio – consisting of iron ore, lithium and graphite – in the Pilbara and Yilgarn regions of Western Australia.
As part of the agreement, Mineral Resources will also provide funding assistance of up to $35 million to RDG towards development of a manganese project via a services contract, the company announced on Wednesday.
The services contract will include the design, construction, supply and commissioning of processing and non-processing infrastructure. The loan to RDG will have a five-year term with an interest rate of 8.125 per cent.
RDG was co-founded by chairman Andrew Ellison, who is the brother of Mineral Resources’ managing director Chris Ellison.
As a result, Chris Ellison has recused himself from all board discussions at Mineral Resources relating to RDG or the transaction.
Mineral Resources chairman Peter Wade said the restructure of the manganese assets would help the company preserve longer term optionality.
“Mineral Resources will support RDG in its aspirations to grow the volume and value of project work in the mining, energy and infrastructure sectors at a level that is complementary to our own contracting and mining services focus,” he said.