ArcelorMittal to Sell Stake in S Africa's Manganese Explorer
11/15/2012| 05:41am US/Eastern
By Alex MacDonald
ArcelorMittal (>> ArcelorMittal) has agreed to sell its 50% stake in South African manganese explorer Kalagadi Manganese Ltd. for 3.9 billion rand ($447 million) as it continues to sell non-core assets to pay down debt.
The world's largest steelmaker, which accounts for 6% of the world's steel output, said Thursday it has agreed to sell its stake to Mrs. Daphne Mashile-Nkosi or her nominee, which may be a consortium consisting of shareholders from Kalahari Resources or other third parties. Mrs. Mashile-Nkosi is the executive chairperson of Kalahari Resources, a majority black-owned company that she helped create and in which women occupy the top positions.
Kalagadi Manganese operates in the Northern Cape Province of South Africa and is jointly owned by ArcelorMittal, Kalahari Resources, which has a 40% stake, and the Industrial Development Corp. with a 10% stake. The three farms on which Kalagadi Manganese holds mining rights are believed to contain 960 million metric tons of manganese ore. A recent exploration program has identified 102 million tons of mineral resources there.
The deal is subject to regulatory approvals and the waiver of preemptive rights of the other shareholders.
ArcelorMittal is seeking to reduce its net debt through a combination of cost-saving measures and sale of non-core assets amid weak steel demand, particularly in Europe. Since September 2011, it has sold just over $3 billion in non-core assets.
It has also announced plans to permanently shut four blast furnaces in Europe and has temporarily idled several others.
Write to Alex MacDonald at [email protected]
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