Amcol Acquires Chrome Mine

Amcol International, the parent of American Colloid Co., has agreed to take a stake in a chrome mine in South Africa. The investment is valued at approximately $38.3 million (A$41 million.) Chrome ore is used to produce chrome sand, which Amcol markets to the U.S. metalcasting industry Amcol will purchase the 74% interest in the mine from Chrome Corp. Ltd., an Australian company. The remaining 26% is owned by Aka Capital. While it will retain control of the business, Amcol says it is discussing a co-investment by another, unnamed South African company, in the mine, the processing operations, and downstream marketing of the mine products. According to Amcol president and CEO Larry Washow, “This investment will allow Amcol to be the premier dedicated chrome sand supplier to foundries around the world. We are fortunate to have an attractive investment opportunity in a key product line that offers significant growth potential." Amcol details that approximately 90% of the 20 million tons of chrome ore mined annually is used to produce ferrochrome, according to industry estimates. Rising global demand for stainless steel has tightened ferrochrome supplies, impacting supplies of foundry chrome. The transaction remains subject to several conditions, including: : the approval of the seller's shareholders; consent under Section 11(1) of the Mineral and Petroleum Resources Development Act from the South African Minister for Minerals and Energy; confirmation of the existing prospecting rights or the grant of a renewal of the prospecting rights; approval from the RSA Exchange Control Authorities; unconditional approval from RSA Competition Authorities; and consent from Amcol's bank syndicate.