MRC to increase stake in Tormin project in South Africa
Mineral Commodities (MRC) plans to increase its stake in Mineral Sands Resources (MSR), which owns the Tormin mineral sands operation in South Africa, to 69%.
MRC and Blue Bantry, its empowerment partner, have signed formal agreements to restructure their holding in MSR to comply with the 2018 Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry.
The agreement includes adopting a recoverable interest methodology to decide the amounts owing, with MRC recovering contributed capital by withholding 80% of available dividends payable to participants until its capital contribution is fully repaid.
Waiver
MRC will waive off long-term loans and other amounts owed to it by Blue Bantry in exchange for reducing the latter’s interests in MSR from 50% to 21%. Upon the restructure of MSR, MRC’s subsidiary MRC Resources will own a 69% stake in MSR, while Blue Bantry will hold a 21% stake. The restructuring agreement is subject to the satisfaction of conditions such as the receipt of all required regulatory approvals.
In a press statement, MRC said: “The company formed the view that dilution of the interests of its B-BBEE partner in MSR through existing historical shareholder and loan agreements would be inconsistent with the relationship between the parties and the intent of the 2018 Mining Charter without some form of consideration.”
MRC interim CEO Adam Bick said: “We look forward to welcoming our B-BBEE Partner Blue Bantry as a shareholder in MRC and our [historicaly disadvantaged] employees as shareholders of MSR, and to sharing the benefits of not only Tormin operations but the company’s overall capital growth with our new stakeholders.”
The Tormin Mineral Sands Operation is located on the west coast of South Africa, approximately 360km north of the city of Cape Town. The project hosts multiple high-grade placer beach and strandline mineral sands deposits, including zircon, ilmenite, rutile, garnet, and magnetite. Tormin is a significant supplier of garnet concentrates, providing around 25% of the world’s demand for this material.
