JOHANNESGBURG (miningweekly.com) – South Africa-based diversified miner Exxaro on Monday reported that it had entered into an agreement with US chemicals manufacturer Huntsman regarding its interest in the Tiwest joint-venture (JV).

Exxaro currently operates the Tiwest mineral sands operations – the worlds largest integrated titanium minerals production and manufacturing company, in a 50:50 JV with Tronox Western Australia.

Huntsman is now proposing to acquire Tronox’s share in Tiwest.

It announced in a separate statement that its $415-million bid also includes Tronox’s titanium dioxide facilities in the Netherlands and the US (excluding Savannah and Georgia), as well as its electrolytic production facilities in the US.

Tronox filed for Chapter 11 relief under the US Bankruptcy Code in January, to allow it to restructure its debts, reorganise its business and tackle environmental legacies.

Exxaro said in a statement that it had agreed that certain JV contractual restrictions, including an applicable right of first refusal and change of control rights, would be waived in the event that Huntsman was approved by the US Bankruptcy Court as the buyer of the Tronox Western Australia assets.

“It is important for Exxaro to continue to have an experienced and technologically advanced partner at Tiwest. Huntsman is such a partner and they will bring significant technical knowledge and marketing competence to the pigment side of the business. We are satisfied that Huntsman was selected as the stalking horse bidder and look forward to working with them,” said Exxaro CEO Sipho Nkosi.

A stalking horse bid is a binding proposal from an interested buyer chosen by the bankrupt company to acquire assets, subject to a higher or better offer acquired through an auction process approved by the bankruptcy court.

Once the court has approved an auction process and protections for the stalking horse bidder, other potential buyers may submit competing bids for the bankrupt company’s assets. The final winner of the assets would be determined by auction.

If Huntsman is ultimately approved by the bankruptcy court as the buyer, and the sale is approved, Huntsman’s completion of the proposed acquisition of the assets of Tronox as agreed remained subject to customary antitrust and other regulatory approvals.

Huntsman president and CEO Peter Huntsman said that combining its pigment division with the assets of Tronox, would realize substantial efficiencies.

“This acquisition, even before expected synergies, would be immediately accretive to our operating earnings and cash flow, as well as reduce our debt leverage,” he said in a statement.