PERTH (miningweekly.com) – Mining giant BHP Billiton said on Wednesday it would exit the titanium minerals industry in South Africa, selling its 37% stake in mineral sands producer Richards Bay Minerals (RBM) to Rio Tinto.

The deal would double Rio Tinto’s stake in RBM to 74%, with black economic-empowerment partners holding 24% and employees the remaining 2% stake.

BHP Billiton South Africa chairperson Xolani Mkhwanazi said that the company’s position in RBM was a nonoperated shareholding in an industry in which it held no other interest.

“BHP Billiton will continue operating in Southern African energy coal, aluminium and manganese businesses in a sustainable manner,” he said.

Rio Tinto manages RBM and markets its products, including titanium dioxide feedstocks, high purity iron, zircon and rutile.

“RBM is an important part of Rio Tinto’s world class 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,” commented Rio Tinto diamonds and minerals CE Harry Kenyon-Slaney.

As part of the restructuring of RBM in 2009, BHP Billiton and Rio Tinto concluded a put option agreement, which made provision for BHP Billiton to sell its interest in RBM to Rio Tinto pursuant to an agreed valuation process.

The completion of the sale was conditional upon the fulfillment of customary regulatory approvals, with the final consideration to be determined according to the agreed valuation process.

Mkhwanazi noted that the parties would work together to facilitate a smooth transfer of BHP’s stake in RBM.

RBM produces around 1.9-million tons of product a year, of which 95% is exported, and with zircon and rutile separated and sold in their mineral form. Titania slag and pig iron are the bulk of the business, and the combined output of the four furnaces is some one-million tons of slag and 525 000 t of iron a year.
 

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