US-based titanium dioxide pigment producer Tronox has acquired South African miner Exxaro’s mineral sands projects; including the Tiwest mineral sands project north of Perth.
The transaction will see Exxaro emerge with a 38.5 per cent minority shareholding in Tronox, in return for its stake in Tiwest, along with 74 per cent stakes in Exxaro’s KZN Sands and Namakwa Sands operations in South Africa.
The two companies were developing the Tiwest project in a 50:50 joint venture. it consists of the Cooljarloo mining operation, near Gingin, the Chandala separation facility, 60 km north of Perth and the Kwinana pigment processing plant.
Also, Exxaro will have the right to appoint three directors to the Tronox board.
Tronox chief executive Dennis Wanlass said the acquisition was highly strategic, bringing together the company's proprietary pigment making technology with Exxaro’s mining, separation and smelting operations.
Tronox is the planet’s fifth largest producer of titanium dioxide pigment.
“This strategically compelling combination provides flexibility and manageability of an important raw material source and firmly positions the combined entity as a highly efficient, vertically integrated pigment company,” Mr Wanlass said in a statement.
“Combining this vertically integrated source of ore, along with our existing contracts with other ore producers, ensures Tronox will have the necessary feedstock to support our growth strategies in the years to come.
Mr Wanlass said the combined entity would have around 3,500 employees in 16 locations around the globe.
Exxaro chief executive Sipho Nkosi said an integrated model had always been a part of the company’s strategy.
“The transaction will add security to the future of the KZN Sands and Namakwa Sands operations as it will, to a large degree, limit market cyclicality and surety of demand and will ensure continued ability to operate these assets and protect jobs.
“The combined company should realise significant cost benefits and efficiency improvements and it provides a platform for future global growth in pigment production.”
