omh deal nothing to do with tty

OMH to buy in to African manganese
BARRY FITZGERALD
September 28, 2009
THE Northern Territory manganese producer, OM Holdings, is about to unveil a big South African manganese acquisition in a deal involving Pallinghurst, the resources investment vehicle of the former BHP Billiton chief executive, Brian Gilbertson.

OMH went in to a trading halt last week, saying only that it planned to make an announcement this week regarding a ''significant acquisition.''

Mr Gilbertson left BHP abruptly in January 2003 after only six months in the job when his plans to make a takeover bid for Rio Tinto caused a rift with the Don Argus-led BHP board.

He has since set out to replicate BHP in part by plunging the South African-listed Pallinghurst in to the steel-making raw commodities of iron ore and manganese.

An attempt by Pallinghurst to take control of the West Australian manganese producer Consolidated Minerals in 2007 failed when the Ukrainian investor, Gennadiy Bogolyubov, over-bid for the group with a $1.2 billion offer. Along with the Woodie Woodie manganese mine, the ConsMin takeover delivered Mr Bogolyubov a 12 per cent stake in OMH.

As a result, the proposed deal expected to unveiled between OMH and Pallinghurst this week is likely to come under intense scrutiny.

Steel sector analysts speculated on Friday that OMH was about to acquire manganese interests in South Africa from Pallinghurst and Pallinghurst-related companies in return for scrip.

The deal is likely to be of sufficient size to radically alter the make-up of OMH's register.

ConsMin will not be alone in watching what is happening at OMH. BHP is Australia's biggest manganese producer from the recently expanded Groote Eylandt operation.

Pallinghurst, together with its co-investors, holds 49.9 per cent of the world-class Tshipi manganese project in the Kalahari Basin.

Mr Gilbertson said recently the basin was home to 80 per cent of the world's manganese reserves. ''It is from here that the bulk of the ore essential for world steel production will be sourced for centuries to come,'' he said.