Xstrata and SA Chrome & Alloys have agreed to establish a shared venture. Under the agreement both parties will contribute their South African chrome and ferrochrome assets. The deal is yet to gain the required approvals for completion.
Under the agreement they will both participate in the aggregate earnings of the venture starting 89% for Xstrata and 11% for SA Chrome in year 1, to 82.5% for Xstrata and 17.5% for SA Chrome in year 3 and beyond.
The partnership will allow both parties to exploit significant operational efficiencies.
It will produce 1.45 million tonnes of ferrochrome, which equates to about 26% of the world’s annual production, making it the world’s leader.
For more information on ferrochrome, click here.