Sale raises hopes of Pilbara mine rebirth
The Ukrainian billionaire who paid $1.2 billion for Consolidated Minerals at the peak of the boom has sold the manganese miner to a Chinese company, a deal that observers hope could see production restart at the mothballed Pilbara Woodie Woodie mine.
Gennadiy Bogolyubov announced last week he was selling ConsMin to China Tian Yuan Manganese, which is the world’s biggest producer of electrolytic manganese metals.
The sale price was not disclosed but ConsMin said the new owner would take over its $US400 million debt.
China Tian Yuan Manganese is a subsidiary of TMI, which is ConsMin’s biggest customer.
“TMI has indicated its willingness to invest significant resources in developing the infrastructure supporting ConsMin’s Ghanaian operations,” ConsMin said in a statement.
“Such investment will allow the company to further increase the manganese ore export capacity to meet expected increasing demand for Ghanaian-quality manganese ore.”
While the statement did not discuss Woodie Woodie, observers say TMI’s pro-investment approach was a flicker of hope for the 380 workers who lost their jobs in January when the mine, 400km south-east of Port Hedland, was shut amid tumbling manganese prices.
Those workers will pay close attention to comments by TMI president Tianjiang Jia that he looked “forward to partnering with the existing management team in developing the company’s operations for the benefit of all stakeholders”.
It is understood Woodie Woodie’s break-even point is more than $US3 a dry metric tonne of 44 per cent manganese ore. Prices were under $US2 when the mine closed this year.
Manganese is now worth about $US3.22 per dry metric tonne.
Before it was shut, the Woodie Woodie mine accounted for exports of about 1.5 million tonnes of high-grade ore a year, between 5 and 10 per cent of the seaborne trade to China.
Last week’s agreement is subject to government approvals, the signing of a key offtake agreement and the approval of the holders of $US400 million worth of ConsMin debt.