Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Creditors of International Ferro Metals (IFM) will, on March 24, vote on an amended business rescue plan (BRP) for subsidiary IFM South Africa (IFMSA), with the BRP outlining a decrease in the purchase price payable by Samancor Chrome to an estimated R520-million, compared with an initial price of R720-million.
The lower purchase price followed a January settlement between IFM’s South African subsidiaries, IFMSA and IFM SA Holdings, and Rustenburg Platinum Mines (RPM) regarding an upper-group two (UG2) chrome ore supply dispute.
IFM’s South African subsidiaries in December started legal proceedings against RPM, after the latter indicated that it would terminate the agreement that obliged it to supply IFMSA with 15 000 t/m of UG2 chrome ore at no cost.
Under the terms of the settlement agreement, RPM would supply IFMSA with 10 000 t/m of UG2 chrome ore throughout 2016 at no cost. From January 2017 to November 2020, RPM would supply IFMSA with 7 500 t/m of UG2 chrome ore at a cost of R170/t.
At the time of announcing the settlement, IFM said the agreement had eliminated the uncertainty surrounding the supply agreement and that it would impact the value of IFMSA’s assets and would, therefore, affect the purchase price.
Samancor is expected to pay an estimated R310-million for the business and assets of IFMSA, R140-million for the IFMSA mining right and beneficiation plant, R70-million for certain receivables of IFMSA’s Sky Chrome deposit and R1 for Sky Chrome’s equity.
The acquisition of IFMSA by Samancor remained subject to various conditions, including regulatory approvals.