OM Holdings says the board has reviewed and considered the volatile global market environment, including the current state of the international economic environment and the global manganese and Hong Kong equity markets, and has concluded that the company needed to assess alternative strategic options in order to execute its growth strategy.
OM’s CEO Peter Toth says the discontinuation of the dual listing process was clearly in the best interest of the company. “The rationale behind this was primarily to provide OM with access to capital to develop various strategic projects, including our Malaysian smelting projects, capture strategically suitable exploration opportunities, along with broadening our shareholder base.”
He says that the company’s core strategy of becoming a leading manganese producer, identifying and developing key growth projects, and pursuing suitable mergers and acquisition opportunities had not changed.
“We are now evaluating alternative strategies to access the capital required for the projects, and at the same time unlock significant shareholder value through a review of a proposal to potentially demerge our mining and smelting assets.”
If the evaluation determines that the demerger is in the best interest of the company, OM’s mining operations would comprise the Bootu Creek project and its associated infrastructure in Northern Territory, the strategic investment in South Africa’s Ntsimbintle and its investments in manganese exploration companies and projects.
An independent downstream smelting and marketing business would be expected to focus on an Asia-focused marketing and trading program, as well as the operation of the Qinzhou sinter and smelting plant in China, and the execution of the Malaysian smelting project.
The company’s manganese and ferro silicon smelting project in Johor, Malaysia, is focused on developing an alloy production centre with annual capacity of 66,000 tonnes of manganese alloy and 300,000 tonnes of manganese sinter, along with a stockpiling, blending and distribution centre capable of holding up to 500,000 tonnes of raw materials.
Construction of the plant is scheduled to start in the fourth quarter of 2011 with production expected to start in the first quarter of 2013.
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