Rio Tinto has acquired BHP Billiton’s stake in Richard Bay Minerals (RBM), doubling its holding.
According to Rio, the purchase of BHP’s 37% stake sees it move its holding over the company to 74%.
BHP exercised an option it had agreed to during the restructuring of RBM in 2009, which included the provision for BHP to sell its interest to Rio Tinto at a pre-agreed value.
This move also sees the exit of BHP from the titanium industry.
Xolani Mkhwanazi, BHP’s Southern Africa chairman explained the move, stating that the miner’s "position in RBM was a non-operated shareholding in an industry in which it held no other interests".
Rio on the other hand runs the Fer et Titane operation in Quebec and QIT Madagascar Minerals.
Rio‘s head of diamonds and minerals, Herry Kenyon-Slaney, stated that "RBM is an important part of Rio Tinto’s titanium dioxide portfolio.
"Doubling our stake in the business solidifies our position at a time when the long-term outlook is strong and demand for higher grade titanium dioxide is growing, driven by urbanisation and rising environmental standards."
Completion of the sale is conditional upon regulatory approvals.
RBM is a South African mineral sands operation, and the leading producer of chloride titanium feedstock.
The remaining shares of the operation are held by Black Economic Empowerment (BEE) parties, at 24%, and RBM’s employees at 2%.