Evraz has agreed to sell 59% stake in the South African vanadium Vametco company for $ 17 million local Bushveld Minerals. The deal is expected to close in June 2018, required the consent of the co-owner of the asset - Japanese Sojitz (owns 15,9% Vametco). Sell other assets in South Africa - unprofitable Evraz Highveld Steel and Vanadium - has not yet been, and now it is waiting for the sale of property. However, to fully withdraw from Evraz vanadium business is going.
Roman Abramovich's Evraz and partners may sell its stake in the company vanadium Vametco (South Africa) consortium Bushveld Vametco Limited (BVL), in which 45% will be from the local mining Bushveld Minerals, 55% - in a resource fund Yellow Dragon, follows from the Bushveld posts. While BVL wholly owned Bushveld Minerals, but on Friday it announced the involvement of partners in the project.
Vametco, according to the Bushveld, owns vanadium deposits in Brits with reserves of 27 million tonnes and resources of 135 million tonnes of ore and the plant capacity of 2.7 thousand. Tons of vanadium oxide a year. In 2015 Vametco released 2.4 tons of vanadium, revenue -. 629 million South African rand ($ 40.4 million), operating profit - 26.7 million South African rand ($ 1.7 million).
Vametco Evraz got together with Amer. Ikanskim plant Stratcor when buying in 2006 75% Strategic Minerals Corporation (SMC) for $ 110 million Evraz currently owns 59% Vametco by 78.8% of the shares in SMC, the second co-owner of the SMC - Japanese Sojitz, which owns 15,9% Vametco. Another 25.1% of the shares owned by the South African population Vametco under the Black Economic Empowerment program, outlined in documents Bushveld.
The total amount of the transaction with the BVL Evraz (agreement signed on May 9) will be $ 17.2 million, is to be held in two stages, the buyer stated in the message. The first stage - the redemption on June 17, 23% stake in SMC for $ 4.7 million to give BVL exclusive rights to the due diligence of the asset. For the second tranche of $ 12.5 million the consortium will receive the remaining 55,8% SMC, but for the closing of the transaction needs the refusal itself SMC and Sojitz of preemptive rights package in Evraz, the approval of the South African regulators, Bushveld shareholders and fulfillment of other conditions. The second stage can take up to one year or more, in this period of BVL may introduce their representatives to the boards of directors of SMC and Vametco and get a veto on a number of transactions.
Bushveld is interested in the transaction: the cost of Vametco have one of the lowest in the world, according to the buyer's statement, in 2015 - $ 17.33 per 1 kg. The average price of vanadium, etc.oshlom year was $ 18.58 per 1 kg and in Europe $ 20.2 per 1 kg US Evraz indicated in the report. Bushveld Vametco plans to increase capacity to 3.34 thousand tons per year, the asset is bordered by a private buyer vanadium project -. It will ensure Vametco cheap ore and extend its operation.
In Evraz declined to comment, Sojitz in the request "b" is not answered. Source: "b" familiar with the plans of Evraz, he said Vametco does not play an important role in the production chain of the holding and its finances, and therefore considered its sale. As he wrote, "Kommersant" in October 2015, negotiations with Evraz on Vametco and Stratcor stated a little-known American Global Renewable Energy Ltd (indicated in the report of another crisis managers holding the asset in South Africa - Evraz Highveld Steel and Vanadium). But the deal did not take place, Highveld property decided to sell for 1.3 billion South African rand ($ 83.5 million) by 2019.
It is obvious that Evraz wants to leave South Africa because there holding assets become unprofitable or low-margin (in Vametco margin on operating income - 4%), overlaps and specificity of doing business in the region, indicating Oleg Peter and Paul from the BCS. But toMpano is unlikely to be completely out of the vanadium business, he said. In Evraz there is "Evraz Vanadium Tula" (12.5 thous. Tons per year) and the Czech Evraz Nikom (about 5 thousand. Tonnes per year). Plans for the sale of these assets is not, it confirms the source "b" familiar with the company's plans, but the prospects Stratcor plant he did not name. Financial performance for the vanadium Evraz does not disclose in 2014, instead of them in the reports are the figures for "other operations": in 2015 the revenue from them fell by 33% to $ 443 million, EBITDA - by 62%, to $ 14 million.