Assore halts mines and smelters, prioritises on-time supplier payment
MINING WEEKLY / 31 MARCH 2020 - 14.33 / MARTIN CREAMER - CREAMER MEDIA EDITOR
JOHANNESBURG (miningweekly.com) – Mining and marketing company Assore, which is delisting from the Johannesburg Stock Exchange after 70 years, on Tuesday informed its shareholders that it had taken lockdown steps following the increased incidents of COVID-19 in South Africa.
Assmang, which is half owned by Assore and jointly controlled with African Rainbow Minerals Limited, has put its Beeshoek and Khumani iron-ore mines, Nchwaning and Gloria manganese ore mines and smelter at Cato Ridge on care and maintenance, and ceased production for 21 days, as of midnight on Thursday, March 26.
Likewise, Dwarsrivier Chrome Mine and Wonderstone have been put on care and maintenance for the same period.
Assmang’s 54%-owned smelter in Sarawak, Malaysia continues to operate on a skeleton staffing arrangement.
Accordingly, Assmang, Dwarsrivier and Wonderstone have all declared force majeure on customer, supplier and freight contracts. Assore is working closely with the affected customers and suppliers to manage the situation and the disruption this will cause.
Assmang has received permission to operate its iron-ore load-out facilities and will continue to rail on-mine stock to Saldanha port. However, shipments of iron-ore will be constrained during this period.
The company assured its shareholders that the limited operations would be run strictly in accordance with Department of Mineral Resources and Energy concession regulations
While ensuring that the safety of the company’s people was maintained as a top priority.
In addition, Assore, headed by Charles Walters, stated that it had made it a priority to pay all its staff their full basic salary during the lockdown period and has undertaken to pay all suppliers on-time for goods and services received.
Earlier this month, Assore announced a transaction that will result in the minorities in the company being bought out and the company delisting from the exchange, where it has been since 1950.
Assore’s current shareholding structure comprises 52.4% belonging to Oresteel Investments, owned by the Sacco family and Sumitomo, of Japan, and a 26.1% black economic empowerment (BEE) shareholding, with the remaining 21.5% free float held by various minorities.
Of this small free float, 4.1% is held by various members of the Sacco family in their individual capacities. This leaves only 17.4% as a true minority free float.
The board is proposing that the company use its internal cash resources – it reported R8-billion net cash on its balance sheet as at end-December – to buy back the 17.4% of its shares not held by Oresteel, BEE shareholders or the Sacco family.
The offer price is R320 per share, excluding the interim dividend of R7 per share for a total consideration of R7.8-billion, a 27% premium. Following the transaction, the shareholdings of Oresteel, the BEE investors and the Sacco family in Assore will be increased pro rata to 63.4%, 31.6% and 5% respectively, and the company will be delisted from the JSE and run privately.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER