South32 has agreed to divest Tasmanian Electro Metallurgical Company (TEMCO) to Sanjeev Gupta’s GFG Alliance.
Upon the approval of the Australian foreign investment review board, GFG will acquire all TEMCO shares from South32 subsidiary, Groote Eylandt Mining Company (GEMCO).
Parties have inked an ore supply agreement from GEMCO to TEMCO to allow the transaction to proceed.
According to South32 chief executive Graham Kerr, the TEMCO agreement is a milestone for the company as it continues to reshape its portfolio.
“Today’s agreement follows an extensive review of options regarding the future of our manganese alloy business,” Kerr said.
“The transaction and our ongoing supply of ore to TEMCO will see the smelter, first established in 1962, continue to operate into the future.
“TEMCO has a proud history of being a significant contributor to the local economy and we’re pleased to have achieved what we believe is a positive outcome for our people, the local community and Tasmania.
“Looking forward, we are confident that GFG, a current TEMCO customer, is well placed to operate the smelter, with the acquisition representing an opportunity to further vertically integrate its steel business.”
GEMCO is owned by the Samancor Manganese joint venture (JV) managed by South32, but the transaction does not include the JV’s South African manganese alloy smelter, Metalloys.
Metalloys has been separately placed under care and maintenance and will remain under the ownership of the JV.