PT:Metorex to sell Sable copper/cobalt unit in Zambia to Glencore
London (Platts)--8Jun2011/543 am EDT/943 GMT
Metorex has entered into an agreement to sell its Sable Zinc unit in Zambia to a subsidiary of Switzerland-based commodities group Glencore International, the South African base metals miner said Wednesday.
The Sable Zinc operation in Kabwe comprises a copper and cobalt processing facility that treats concentrate purchased from various suppliers in Zambia and the Democratic Republic of the Congo. Production in the three months to March 31 was 728 mt of copper and 4 mt of cobalt.
The sale of the Sable Zinc processing plant is for a base price consideration of Rand 190 million ($28 million), Metorex said.
The base price may be reduced for potential liabilities, if any, in respect of Sable, and increased or reduced by changes in the audited net asset value of Sable between March 2011 and a date to be determined by which all conditions applicable to the sale are satisfied, the company added.
But the base price cannot be reduced by more than Rand 70 million.
Metorex will also advance a shareholder loan to Sable amounting to Rand 35 million before the completion of the sale, which will have the effect of increasing the base price to Rand 225 million.
Brazilian mining group Vale announced in April it had agreed to acquire Metorex in a deal worth Rand 7.524 billion. The sale or transfer of Sable Zinc Kabwe by Metorex to a third party is one of the conditions of the Vale deal.
"There was wide interest in Sable and we are pleased to announce that we have achieved an agreement with Glencore in a reasonably short timeframe. This is an important milestone in advancing the Vale offer," said Metorex CEO Terence Goodlace in a statement.
