Glencore Considering Bid for Impala’s Chrome Waste BusinessBy and
Chrome is produced as a byproduct of platinum mining
Operation produces 200,000 tons of chrome concentrate
Glencore Plc, the mining and trading firm run by billionaire Ivan Glasenberg, is considering a bid for Impala Platinum Holdings Ltd.’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 (Pty) Ltd., 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 67 million rand ($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.
Impala shares rose 1.7 percent to 54.37 rand as of 1:25 p.m. in Johannesburg, valuing the company at 39.9 billion rand. Glencore shares rose 0.3 percent to 327.45 pence in London.
“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 Ltd. 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 Ltd. makes it the world’s largest ferrochrome producer.
Peter Grauer, the chairman of Bloomberg LP, is a senior independent non-executive director at Glencore.