Tronox is also expected to enter into a supply agreement with Eramet's Grande Côte Operations mineral sands mine in Senegal
Tronox Holdings, a manufacturer of titanium dioxide pigment, has agreed to acquire the TiZir Titanium and Iron (TTI) business from French mining and metallurgy firm Eramet for approximately $300m.
Located in Tyssedal, Norway, the TTI facility is engaged in upgrading ilmenite to produce approximately 230,000 tonnes high-grade titanium slag and 90,000 tonnes high-purity pig iron.
Tronox chairman and chief executive officer Jeffry N Quinn “This highly strategic acquisition represents the next step in advancing our vertical integration strategy, providing Tronox with increased titanium feedstock capacity to better fulfill our internal requirements, and in turn, better serve our pigment customers with a low-cost, secure source of supply.”
Tronox will sign a supply agreement with Eramet’s Grande Côte mine
As part of the transaction, Tronox is expected to sign a supply agreement with Eramet’s Grande Côte Operations mineral sands mine in Senegal to provide Grande Côte’s ilmenite to TTI.
In addition, Tronox expects that all TTI’s requirements will be met from the Grand Côte mine for the first two years.
The $300m purchase price will be funded with cash from the balance sheet. The transaction is expected to achieve $15 to 20m in run-rate synergies in year three.
The transaction is subject to certain consents and customary closing conditions including regulatory approvals, and has been unanimously approved by the boards of directors of Tronox and Eramet.
For the transaction, Credit Suisse served as financial advisor, while Cleary Gottlieb Steen & Hamilton and Wikborg Rein served as legal advisors to Tronox.
Quinn added: “The technology and manufacturing capabilities acquired will lower our cost of obtaining the feedstocks we need to run our pigment plants, broaden the geographic diversity of our titanium feedstock operations, and improve the likelihood of a successful commissioning, ramp up, and eventual acquisition of the Jazan smelter.
“TTI is a great complement to Tronox because of a shared focus on operational excellence, safety and sustainability. We are excited about the opportunities created by the addition of this well-established, high-quality asset to the Tronox portfolio.”