BHP sells Richards Bay stake to Rio Tinto

 

 

RBM has a turnover of more than R6bn a year and exports 99% of the titanium dioxide, high purity pig iron, rutile and zircon that it produces.

 

 

It mines sand dunes just north of Richards Bay, on the north coast of KwaZulu-Natal.

 

 

An analyst estimated the stake would be sold for $1,6bn-$2,2bn.

 

 

The deal brings Rio’s stake to 74%. Black economic empowerment parties control 24%, while employees hold 2%.

 

 

RBM was established in 1976 by Canadian company QIT, the IDC and Union Corporation (later Gencor, then BHP Billiton), after the IDC had done the exploration for the mine in 1971.

 

 

Rio Tinto manages and markets RBM’s products. The option for BHP to sell its stake in RBM to Rio formed part of a restructuring of RBM in 2009. The final consideration would be determined via a valuation process.

 

 

BHP Billiton Southern Africa chairman Xolani Mkhwanazi said the group had no other interests in the industry than the shareholding being sold.

 

 

"BHP Billiton will continue operating its S outhern African energy coal, aluminium and manganese businesses in a sustainable manner," he said.

 

 

RBM has plans to mine until at least 2043 by mining an additional area south of the current operations, dubbed Zulti South.

 

 

Rio Tinto Diamonds & Minerals CE Harry Kenyon-Slaney said RBM was important to its business. "Doubling our stake solidifies our position at a time when the long-term outlook is strong and demand for higher grade titanium dioxide is growing, driven by urbanisation and rising environmental standards."

 

 

Rio’s global titanium dioxide business, Rio Tinto Iron & Titanium, includes RBM, its wholly owned Rio Tinto Fer et Titane operation in Quebec; and its QIT Madagascar Minerals operation, where it holds an 80% interest.

 

 

Rio Tinto is headquartered in the UK.