The Woodsmith fertiliser mine in the North York Moors National Park. Image via Sirius Minerals
Mining company Anglo American said on Monday 20 January it had reached agreement on the terms of a recommended cash transaction in which its subsidiary Anglo American Projects (Bidco) would acquire the entire issued share capital of Sirius Minerals.
Anglo, which announced earlier in January it was in advanced discussions to buy Sirius, said the acquisition valued the entire issued and to-be-issued share capital at about £404.9 million (R7.6 billion).
“Bidco and Sirius intend to work together [to the extent legally permissible] to engage constructively with relevant stakeholders,” it said.
North Yorkshire polyhalite project
Last September, Sirius said it was undertaking a strategic review to assess the development plan for its North Yorkshire polyhalite project, including a broader process to seek a major strategic partner.
Anglo American has identified the project as being of potential interest, given the quality of the underlying asset in terms of scale, resource life, operating cost profile and the nature and quality of its product.
“Anglo American’s recommended offer provides greater certainty for Sirius’ shareholders, employees and wider stakeholders, while bringing the prospects for the development of this potential Tier 1 project closer to reality,” CEO Mark Cutifani said on Monday.
Employment and economic stimulus
“We intend to bring Anglo American’s financial, technical and product marketing resources and capabilities to the development of the project, which of course would be expected to unlock a significant and sustained associated employment and economic stimulus for the local area.”
Sirius chairperson Russell Scrimshaw said the company had taken the “difficult” decision to slow the pace of development of the project and initiate a strategic review to reassess how best to unlock the long-term value, following setbacks in the bond market.
“We were successful in reducing the initial funding needs of our project to map out a way to develop the project in a way that better aligned risk to capital providers but, despite an extensive global search for a strategic investor, we have to date not received a firm proposal for a partial project take,” Scrimshaw said.
Stark choice: 100%-control transaction
“The only viable proposal was received from Anglo American in early January, who were only interested in pursuing a 100%-control transaction.”
“We now face a stark choice. If the acquisition is not approved by shareholders and does not complete, there is a high probability that the business could be placed into administration or liquidation within weeks thereafter,” Scrimshaw added.
— African News Agency (ANA), Editing by Stella Mapenzauswa
