Strong manganese price a boost to Pallinghurst dividend

PALLINGHURST Resources said yesterday that the strengthening of the manganese price had helped boost its dividend payout from Tshipi é Ntle Manganese Mining to R1.5 billion (R19.18bn) in 2017.

The hefty payout comes after Jupiter Mines, which is 18.43 percent owned by Pallinghurst, yesterday announced it would make a further $25 million distribution to its shareholders in September 2017.

Jupiter holds a 49.9 percent stake in leading manganese producer, Tshipi é Ntle, which means “beautiful steel” in Tswana.

“The combination of rigorous cost management, positioning Tshipi Borwa in the lowest cost quartile, with the improvement in the manganese price resulted in Tshipi making its maiden distribution of R1bn in March 2017,” the company said.

The Tshipi Borwa Mine is an open pit mine, in the Kalahari Manganese Field in the Northern Cape. Tshipi Borwa mine is described as a modern low cost manganese black economic empowered producer that has been setting the benchmark for how mines should be constructed, managed and operated in South Africa.

Manganese is a metal with important industrial metal alloy uses, particularly in stainless steels. Manganese phosphating is used for rust and corrosion prevention on steel.

“The manganese price has remained strong over the past few months and accordingly, Tshipi has recently agreed to distribute a further R500m to its shareholders in September 2017. This would result in a total return, in 2017, to Tshipi shareholders of R1.5bn.”

Pallinghurst chairperson Brian Gilbertson said in 2016 that through the successful partnership with Ntsimbintle, Tshipi has become a large, long-life and low-cost operator of a world-class mine. The company was exploring all strategic alternatives to realise shareholder value from this asset.

Pallinghurst said previously that Tshipi demonstrated its ability to produce at a rate of up to 3 million tons per annum, which could significantly improve profitability when high manganese prices are sustained.

Pallinghurst was established in 2007 as a limited life mining investment fund to source and develop new value accretive mining projects. The company last month announced a restructuring of the group, including an offer to acquire the minority interests of Gemfields.