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Johannesburg - South32 [JSE:S32], the mining company spun off from BHP Billiton [JSE:BIL], said it may reduce the value of its 60% stake in a manganese venture as it keeps furnaces shut due to low prices for the steelmaking ingredient.
It will delay restarting three of the four ferromanganese furnaces in its Samancor venture with Anglo American [JSE:AGL] after prices declined 20% since July, South32 said in a statement on Tuesday.
The smelters were first shut due to maintenance, said Lulu Letlape, a spokesperson for South32, which operates the venture.
“No permanent employees will be retrenched as a result of this temporary suspension,” the Perth-based company said. South32 is reviewing “the fair value of its interest in the joint venture.”
READ: BHP's South32 risks tough market debut
A writedown at Samancor would be the first impairment for South32, which commenced trading last month after BHP separated 12 assets from Australia, southern Africa and South America into the new company to create the world’s largest manganese ore producer and operator of the biggest silver mine.
South32 is negotiating with Transnet to secure additional rail and port capacity for the export of raw manganese ore from Samancor’s Hotazel mines in the Northern Cape province, the company said in the statement.
“However, export volumes will remain dependent on market conditions,” it said.
