London - Glencore, the mining and trading firm run by
billionaire Ivan Glasenberg, is considering a bid for Impala Platinum Holdings’s
65 percent stake in a chrome waste-retreatment operation in South Africa, two
people familiar with the matter said.
Glencore already has an agreement to buy metal from
Chrome Traders Processing, the closely held company that owns 30 percent of the
business controlled by Impala. Glencore, which has chrome assets nearby, is
bullish on prices and keen to grow its presence in the industry that supplies
stainless steelmakers with the ingredient that prevents corrosion, said one of
the people, who asked not to be identified because the information is private.
The operation produces more than 200 000 metric tons of
chrome concentrate a year from tailings, or waste material from platinum
mining, near the northern South African town of Rustenburg. It made a profit of
R67 million ($5 million) in the year through June 30. Impala sees the operation
as a non-core asset and wants to focus on its platinum mines, the
Johannesburg-based miner said earlier this month. Platinum is found together
with chrome in many of the ore bodies mined in South Africa.
Read also: Glencore's copper production slumps
Impala shares rose 2.6 percent to R54.54 as of 11.25 a.m.
in Johannesburg, valuing the company at R40.3 billion. Glencore shares rose 1
percent to 329.75 pence in London.
Bidders welcomed
“It’s early in the process still and we entirely welcome
all interested parties,” Impala spokesman Johan Theron said by phone, declining
to comment on Glencore specifically. “We’re confident we can realize value for
shareholders.”
Standard Bank Group is running the sales process and is
drawing up a shortlist of suitable bidders, one of the people said. The lender
declined to comment.
Glencore owns five chrome smelters and seven chrome mines
in South Africa, including the Waterval chrome mine and Wonderkop ferrochrome
plant. The partnership that Glencore has with Merafe Resources makes it the
world’s largest ferrochrome producer.