Gulf Manganese Corporation has finalised an agreement to acquire two ferromanganese smelting furnaces which it intends to use for its Kupang Smelting Hub in West Timor, Indonesia. The furnaces will be acquired from South African-based Transalloys and will be relocated later this year.
ASX-listed Gulf will purchase the furnaces, including related equipment, from Transalloys for total cash consideration of US$1 million. Gulf has also agreed to supply Transalloys with up to 30,000 tonnes annually of high grade manganese ore at the current reported Metal Bulletin’s index price for manganese lumpy, for three years once export licences have been granted.
Specialist engineering firm XRAM Technologies has been engaged to undertake all design and construction requirements associated with the refurbishment and relocation of the furnaces to the Kupang hub. The smelters are expected to be shipped from their current location in South Africa in October with arrival at the Kupang site anticipated in November.
Gulf’s managing director Hamish Bohannan said, “The acquisition of our first two smelting furnaces is a key milestone for Gulf and represents a significant step forward in our evolution as a leading manganese alloy producer.”
The company has also been boosted by an investment in the Kupang hub by Indonesian-based Marthen Amtiran. For his $10 million investment, the investor will receive a 10% stake in Gulf.
The cornerstone investment will provide Gulf with the requisite financial flexibility to fast-track development of the Kupang Smelting Hub. Following the initial investment, Marthen Amtiran will have a six month option to purchase an additional 5% interest in Gulf’s Indonesian subsidiary for US$7 million.
Hamish Bohannan said, “The securing of a local cornerstone investor is a transformational milestone for Gulf, its shareholders, and the stakeholders of PT Gulf Mangan Grup. Gulf is now well funded to execute a number of key value drivers in the near-term, including the purchase and transportation of our initial manganese smelting furnaces from South Africa and the commencement of site works at Kupang.”
The company aims to produce a premium quality 78% ferromanganese alloy resulting from the unique qualities of the Indonesian high grade, low impurity manganese ore.