PERTH (miningweekly.com) – Diversified miner South32 on Thursday announced that the Samancor Manganese joint venture (JV), in which it holds a 60% stake, had inked a deal with Sanjeev Gupta’s GFG Alliance to divest of its shareholding in the Tasmanian Electro Metallurgical Company (Temco).

Temco produces ferromanganese from ore produced at the Groote Eylandt Mining Company, and exports it to customers in Asia and North America, as well as steel producers in Australia and New Zealand.

South32 CEO Graham Kerr said the agreement with GFG Alliance represented another milestone for the company as it continued to reshape its portfolio.

“Today’s agreement follows an extensive review of options regarding the future of our manganese alloy business. The transaction and our ongoing supply of ore to Temco will see the smelter, first established in 1962, continue to operate into the future.

“Temco has a proud history of being a significant contributor to the local economy and we’re pleased to have achieved what we believe is a positive outcome for our people, the local community and Tasmania,” Kerr said.

He added that the company was confident that GFG Alliance, as a current customer of Temco, was well placed to operate the smelter, with the acquisition representing an opportunity to further vertically integrate its steel business.

The transaction is subject to a number of conditions, including Australian Foreign Investment Review Board approval.

On the satisfaction of this condition, GFG Alliance will make a nominal payment to Groote Eylandt Mining Company to acquire all of its shares in Temco. As a condition of the completion of the transaction, the companies have entered into an ore supply agreement from Groote Eylandt to Temco.

The transaction does not include the JV’s South African manganese alloy smelter Metalloys, which has been placed under care and maintenance.