TEMCO smelter in Tasmania to be acquired by Sanjeev Gupta’s GFG Alliance
The Samancor Manganese joint venture (JV), owned by South32 and Anglo American, has agreed to sell its stake in Tasmanian Electro Metallurgical Company (TEMCO) held by subsidiary Groote Eylandt Mining Company (GEMCO) to an entity within British business tycoon Sanjeev Gupta’s GFG Alliance.
The deal involves the sale of the TEMCO smelter in Bell Bay, Tasmania, which is powered by hydro energy.
After securing relevant approvals, TEMCO will become part of GFG Alliance’s subsidiary LIBERTY Steel Group, which includes the Whyalla steelworks, InfraBuild, and SIMEC Mining in Australia.
The transaction will save 250 jobs at the TEMCO smelter, said GFG Alliance.
Graham Kerr – South32 CEO said: “Looking forward, we are confident that GFG, a current TEMCO customer, is well placed to operate the smelter, with the acquisition representing an opportunity to further vertically integrate its steel business.”
The TEMCO smelter, which was established in 1962, features four submerged electric arc furnaces, which includes a sinter plant. The smelter is said to be capable of producing nearly 150ktpa of high carbon ferromanganese and 120ktpa of silicomanganese which is used in steel production.
Sanjeev Gupta – GFG Alliance Executive Chairman said: “This acquisition will further enhance LIBERTY’s drive to be self-sufficient and fully integrated across the supply chain, complementing our iron ore production in Whyalla, coking coal in Tahmoor and our Cultana Solar Farm to be built in Whyalla.
“By investing in key inputs, such as ferromanganese and silicomanganese we are able to generate value across the supply chain to ensure Australia has a sustainable and globally competitive steel manufacturing sector.
“It will also help neutralise the volatility in the markets, providing us a reliable supply at a stable cost.”
The closing of the deal will be based on approval by the Australian Foreign Investment Review Board. Following this, GFG Alliance will make a nominal payment to Groote Eylandt Mining Company to acquire all the shares of TEMCO.
As a condition to the closing of the deal, the parties have signed an agreement to enable ore supply from Groote Eylandt Mining Company to TEMCO.
Groote Eylandt Mining Company is a producer of high-grade manganese ore with operations on an island in the Gulf of Carpentaria off the Australian coast.