Feb. 12 (Bloomberg) -- Rare Metals Industries Ltd., a venture with South African, Russian and U.S. investors, said it may list shares to fund a titanium processing plant costing as much as $1.5 billion.
“It could be an attractive option,” RMI’s Project Chairman, Donovan Chimhandamba, said by phone from Johannesburg today. Chimhandamba also works for the strategic project fund at South Africa’s National Empowerment Fund, one of the partners in the planned titanium project along with the country’s state lender, the Industrial Development Corp. Magnesium and Metals Ltd. and TJTI Ltd. are the other partners.
The plant would use Russian technology to produce titanium, zirconium, magnesium and other metals, Chimhandamba said. A local plant would allow South Africa to export processed metals rather than the raw metals currently shipped by companies including Rio Tinto Plc and Exxaro Resources Ltd., he said.
South Africa’s government is pushing companies to add value to commodities before they’re exported to boost income from the nation’s natural resources. Titanium prices are “exorbitantly high” at the moment as supplies are insufficient to meet demand, according to Chimhandamba.
The investors have committed 50 million rand ($6.5 million) to pay for a prefeasibility study that may be completed in six to eight months, while developing a funding model could take 18 to 36 months, Chimhandamba said. The preferred site for the project is near Saldanha Bay on South Africa’s west coast.
Titanium is increasingly being used in industries such as aerospace and defense because it is “as strong as steel and light as aluminum,” Chimhandamba said.
Source www.bloomberg.com
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