Cristal takeover bid hanging
Thursday, 28th December, 2017
A bid by a global titanium dioxide giant to swallow up mineral sands miner Cristal remains in doubt with Europe’s competition watchdog launching a full investigation.
In February this year US-listed mining and manufacturing company Tronox announced a (US) $2.2 billion deal to acquire the titanium dioxide business of Saudi-owned Cristal.
Tronox and Cristal both produce titanium dioxide pigment in Australia, which is added to products such as paint, plastics, and ink to produce whiteness.
The tie-up could have implications for Cristal’s local staff who are employed at the company’s processing plant on the Pinnacles Road and at its mineral sands mines south of the city near Pooncarie.
Tronox said the combined company would be the world’s largest titanium dioxide producer with 11 titanium dioxide plants in eight countries.
The deal has already been cleared in six countries including by the Australian Competition and Consumer Commission (ACCC) which found the combined company would continue to face competition from imported titanium dioxide pigments.
ACCC Commissioner Roger Featherston said Australian pigment demand represented less than one per cent of global demand.
“The presence of other large multinational suppliers that could readily satisfy Australian demand is likely to constrain Tronox post-acquisition,” Mr Featherston said.
More production in China in recent years of increasing quality also appeared likely to provide more sources of supply in the future, he said.
But the deal still needs approval from the European Commission which has launched an in-depth investigation into the merger amid concern it could reduce competition in titanium dioxide pigment markets.
“For some of them, such as paints for buildings and specific types of plastics and paper, the number of suppliers of titanium dioxide is particularly limited,” the Commission said.
The Commission, which is the competition watchdog in the European Union, has until May 15 to make a decision.
Tronox CEO Jeffry Quinn said the company would continue to work with the Commission as it continued its investigation of the planned acquisition.
Earlier this month, the US government, citing similar concerns to the Commission, also filed a complaint aimed at stopping the merger.
According to Cristal Mining’s website, the company employs more than 200 staff and over 350 contractors at its operations in the Murray Basin.
It operates the Gingko and Snapper dredge mines near Pooncarie with ore transported by truck along the Silver City Highway to its mineral processing plant in Broken Hill.
The company is hoping to establish a third mine, Atlas-Campaspe, 80km north of Balranald, which could employ up to 200 people for up to 20 years.