Glencore Said to Study Bid for ENRC Kazakhstan Manganese AssetsNariman Gizitdinov and Firat Kayakiran
Glencore Xstrata Plc is considering an offer to buy manganese assets from Eurasian Natural Resources Corp., the Kazakh miner taken private by its founding shareholders, according to people familiar with the situation.
A sale of ENRC’s Zhairem GOK, which mainly sells manganese concentrate used in steel, could fetch $100 million to $200 million, said the people, who asked not to be identified as the talks are private. The unit produced 181,000 tons in the third quarter of 2013, the last time ENRC reported results before it was de-listed from the London stock exchange.
Such a transaction would enable Glencore to build on its acquisition of manganese assets from Vale SA. Baar, Switzerland-based Glencore, the world’s fourth-largest mining company, bought Vale’s European manganese assets for $160 million in 2012 and produced 191,000 tons of the metal last year.
ENRC’s founders -- Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov -- along with the Kazakh government, took the London-based mining company private in November. The three men raised about $1.6 billion to fund the deal, while the government contributed its 26 percent stake in ENRC shareholder Kazakhmys Plc.
Selling assets would allow the owners to reduce debt. ENRC had debt of $6.1 billion at the end of September, following acquisitions and project cost overruns.