Sale of South32’s South African manganese alloy smelter to Russian exporter Satka collapses
Manganese alloy major Satka has operations in Russia in a disputed region of Ukraine. Now its deal to buy South32’s South African manganese alloy smelter has collapsed.
South32’s plans to offload a mothballed South African manganese smelter to a company with strong Russian links have collapsed, with the Australian miner looking for new options for the smelter’s sale.
The Perth-based mining group group owns a 60 per cent stake in the Metalloys smelter, with Anglo American holding the rest.
It had planned to sell the smelter, which has been in care and maintenance for the last two years, to Satka Investments for an undisclosed amount.
South32 said last year it expected the deal to sell the smelter would close in the June quarter, but said on Monday it had collapsed following “a failure to satisfy certain commercial conditions to the agreement”.
Satka’s trading arm is headquartered in Geneva. But its major operating asset is based in Russia and the company says it also “handles” the exports of a second manganese alloy smelter in one of the disputed regions of Ukraine.
South32 did not give reasons for the failure of the deal, and Satka is not believed to currently be the subject of any sanctions.
But Satka has operations in Donetsk, the breakaway region of eastern Ukraine, and the federal government has declared that sanctions will kick in on the export of energy and mineral resources from the disputed region at the end of March.
The Russian currency has been in free fall since the invasion of Ukraine, major Russian banks have been cut from the international banking system, and Russia itself has imposed bans of the transfer of hard currency out of the country.
South32 declined to comment on the reasons for the deal’s collapse on Monday, but said the smelter “is expected to remain on care and maintenance as we assess future options for the smelter”.
The sale of the ageing smelter would have all-but completed South32’s program of winnowing away its older, more capital intensive and less profitable assets, after the sale of its South African thermal coal mines and its Tasmanian manganese smelter to Sanjeev Gupta’s GRG Alliance last year.
South32 shares were up 3.7 per cent at $5.36 on the ASX on Monday afternoon.
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