JOHANNESBURG (miningweekly.com) – Diversified miner Anglo American on Tuesday announced the final stage of the $1.4-billion Scaw Metals Group divestment with the sale of integrated steelmaker Scaw South Africa to an investment consortium led by South Africa’s State-owned Industrial Development Corporation (IDC).
Included in the R3.4-billion ($440-million) IDC-led deal are Anglo American’s Scaw South Africa partners Izingwe Holdings, Cyril Ramaphosa’s Shanduka Resources and the Southern Palace Group.
The debt-and-cash-free transaction follows the sale of Scaw’s international businesses, Moly-Cop and AltaSteel, to Onesteel in December 2010 for $932-million, also on a debt-and-cash-free basis. In aggregate, the total consideration achieved from the sale of all Scaw’s businesses has amounted to $1.4-billion.
The sale of Scaw brings the total announced proceeds from Anglo American’s divestments of noncore assets to $3.7-billion since 2010.
Anglo American CEO Cynthia Carroll is particularly pleased that the acquisition contributes positively to the South African government’s industrial development objectives by enabling the IDC to play a meaningful role in the strategically important steel industry.
IDC CEO Geoff Qhena says that steelmaker Scaw South Africa is positioned to take advantage of long term growth trends in the mining industry, as well as in the railway and power generation sectors, and is aligned to the IDC’s primary objective of creating balanced, sustainable economic growth in South Africa and across the African continent.”
Izingwe chairperson Sipho Pityana says that the transaction provides a platform for the strategic positioning of a black economically-empowered (BEE) company in the manufacturing sector, in line with the new and emboldened approach of government.
Izingwe sees an opportunity to gradually increase BEE participation in the asset.
The transaction is subject to customary closing conditions such as regulatory approvals in South Africa including but not limited to competition clearance, and is expected to be completed during the course of 2012.
Scaw produces consumables for the mining, rail, power, offshore oil and gas, construction and industrial sectors, such as high chrome and forged grinding media, steel wire rope, chain, wire and strand, cast steel products and low and high carbon long steel products.
The business includes half ownership of Consolidated Wire Industries, a joint venture (JV) with ArcelorMittal South Africa; a 31% interest in the GSIL JV with Lucchini SpA, and 100% of Haggie North America, Haggie Reid, African Wire Ropes, Haggie Zimbabwe, PWB Anchor (now Scaw) and Afrope Zambia.