JOHANNESBURG, July 6 – Tharisa Minerals announced on Thursday that the Competition Commission had approved its acquisition of MCC Contracts.
Last month, Tharisa Minerals entered into a R303.3 million deal to purchase a portion of the mining fleet and transfer employees from its mining contractor in a bid to transition to an owner mining model.
MCC Contracts is the mining contractor at the Tharisa Mine and provides open-cast contract mining services, including drilling, blasting, load hauling and rehabilitation.
Tharisa Mine has a life of 18 years and a further 40 years of underground mine extension.
Tharisa Minerals, a European headquartered low-cost producer of platinum group metals (PGMs) and chrome, agreed to purchase certain of MCC’s existing equipment, strategic components, site infrastructure and spare parts, and transfer the employees currently deployed at its a large scale open pit operation in South Africa.
Tharisa Minerals said the purchase consideration would be funded through a combination of a new bridge finance facility, OEM supplier finance, traditional banking facilities and available cash resources.
The deal would see Tharisa Minerals taking direct control over its mining operations and eliminate the contractor’s risk premiums and profit margins.
The purchase consideration would be settled through a cash payment of R250 million within 30 days while the balance would be paid in cash in six equal monthly instalments.
The 153 “yellow fleet” machines being purchased include excavators, off highway dump trucks, articulated dump trucks and support vehicles, being substantially all of the equipment at the Tharisa Mine, as well as 17 additional machines from another MCC site.
Approximately 900 on-site employees of MCC will be transferred to Tharisa Minerals in terms of Section 197 of the Labour Relations Act.
With the long life of the open pit, Tharisa Minerals said it believed that the transition to an owner mining model was a logical progression in its development with both cost and operational benefits.
By taking direct control of its mining operations, Tharisa Minerals said it would be better placed to control the reef grades, thereby delivering improved quality ore to the processing plants and optimising the feed and recovery within the plants.