GFG will acquire all TEMCO shares held by South32's joint venture owned Groote Eylandt Mining Company (GEMCO)
Australian mining and metals company South32 has announced the sale of Tasmanian Electro Metallurgical Company (TEMCO) to GFG Alliance (GFG).
Under the terms of the binding agreement signed by the companies, GFG will acquire all TEMCO shares held by South32’s joint venture owned Groote Eylandt Mining Company (GEMCO).
GEMCO is owned by the Samancor Manganese joint venture (JV), which is 60% owned by South32 while the remaining 40% is held by Anglo American.
The transaction is subject to approval from Australia’s Foreign Investment Review Board.
South32 CEO Graham Kerr said: “the agreement represented another milestone for South32 as it continues to reshape its portfolio.
“Today’s agreement follows an extensive review of options regarding the future of our manganese alloy business.
“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.
“I would like to thank our workforce for their patience and dedication to continued safe operations throughout the review process.
“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.”
The companies have signed ore supply agreement from GEMCO to TEMCO
Additionally, the companies have also signed an ore supply agreement from GEMCO to TEMCO as a condition to the completion of the transaction.
Furthermore, the company said that the deal does not include the JV’s South African manganese alloy smelter, Metalloys.
Metalloys has been separately placed under care and maintenance.
In February this year, South32 committed to provide a minimum of $2m funding, towards the expenditures for the year two exploration programme at Shorty Creek porphyry copper project.