Engineering & Mining Journal

MAR 2014

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6 E&MJ; • MARCH 2014 www.e-mj.com NEWS-LEADING DEVELOPMENTS Minerals Technologies Inc., first on February 13 for $42/share and then on February 24 for $42.50/share. Then, on February 26, AMCOL announced its board of directors had unanimously approved an amended merger agreement with Imerys, pursuant to which AMCOL shareholders will receive $42.75/share in cash, an increase of $1.75 per share from the ini- tial Imerys offer, for each AMCOL. The $42.75/share offer valued the transac- tion at approximately $1.61 billion, including AMCOL's net debt. In conjunction with the February 26 announcement, AMCOL CEO Ryan Mckendrick said, "We are pleased to offer even more value to our share- holders through the amendment of our merger agreement with Imerys. We are excited about the significant opportuni- ties this transaction will create for our employees and customers, and we share Imerys' commitment to the successful completion of the combination to create a global leader in mineral-based special- ty solutions." AMCOL is headquartered in Hoffman Estates, Illinois, USA, and produces wide range of specialty minerals and materi- als. The company has a presence in 26 countries and is a global leader in the production of bentonite. AMCOL also serves the oil and gas market through its Energy Services business. Imerys is headquartered in Paris, France, and is a world-leading, multi- national producer of mineral-based spe- cialty products. The company's mine pro- duction includes calcium carbonate, alu- mino-silicate, graphite, talc, mica, diato- mite and kaolin. The company operates about 245 industrial sites in 50 countries. Minerals Technologies is headquar- tered in New York City and mines and produces minerals-based products in- cluding ground calcium carbonate and talc. It is a leading supplier of precipitat- ed calcium carbonate to the paper indus- try and a leading supplier of monolithic refractory materials. In announcing its initial, buyout pro- posal, Imerys stated that Imerys and AMCOL have complementary businesses, which it expects to generate significant commercial and operational synergies. The transaction would be accretive for Imerys on an earnings-per-share basis from the first full year of integration, in 2015, Imerys said. Alcoa Permanently Closing Point Henry Smelter Alcoa announced on February 17 that it will permanently close its Point Henry aluminum smelter and two rolling mills in Australia. The smelter and an adjacent rolling mill are located in Geelong, Victoria. A second mill and a recycling facility are located in Yennora, New South Wales. The smelter will close in August and the rolling mills by the end of 2014. Alcoa had the Point Henry smelter under strategic review since February 2012. The review found that the 50-year- old smelter has no prospect of becoming financially viable. The two rolling mills serve the Aus- tralian and Asian can sheet markets, which have been impacted by excess capacity. Alcoa of Australia operates the smelter, which has about 500 employ- ees; Alcoa Inc. operates the rolling mills, which employ about 480 people. Alcoa of Australia also owns and oper- ates the Anglesea coal mine and power station, which currently supply approxi- mately 40% of the Point Henry smelter's power needs. Alcoa of Australia will seek a buyer for the facility, which has the potential to operate on a stand-alone basis after the smelter closes. Alcoa of Australia's Portland alu- minum smelter in Victoria will continue normal operations, as will its bauxite mining and alumina refining operations in Western Australia. The closures will reduce Alcoa's glob- al smelting capacity by 190,000 mt and reduce Alcoa's can sheet capacity by 200,000 mt. Including the closure of the Point Henry smelter, Alcoa has announced closures or curtailments rep- resenting 551,000 mt of capacity, exceeding the 460,000 mt placed under review in May 2013. Once the Point Henry closure is complete, Alcoa will have total smelting operating capacity of approximately 3.76 million mt, with approximately 655,000 mt, or 17%, being high-cost capacity that is offline. Paladin Places Kayelekera on Care and Maintenance Paladin Energy reported in early February its subsidiary company, Paladin (Africa) Ltd. (PAL), is suspending production at the Kayelekera uranium mine in northern Malawi. The mine will be placed on care and maintenance until the price of urani- um recovers. Production during 2013 totaled 2.94 million lb of U 3 O 8 . The Paladin announcement pointed out that the spot uranium price has dropped from $72.63/lb prior to the Fukushima earthquake and tsunami in Japan in March 2011 to a current price of $35.50/lb. The government of Malawi, which has a 15% interest in PAL, has been notified of the decision to suspend operations at Kayelekera. About 194 Malawi national employees and 27 expatriate staff will be retained to maintain the site. Paladin managing director and CEO John Borshoff said, "The Kayelekera mine has performed exceptionally well technically, with production levels record- ed at or near nameplate capacity over the past 12 months and significant achieve- ments made in PAL's cost reduction pro- gram. Nevertheless, despite these consid- erable efforts, Kayelekera continues to operate at a loss due to the low prevailing uranium price. Paladin is unable to con- tinue to provide the level of financial sup- port that PAL has required in recent years, hence the decision at this time. "By placing Kayelekera on care and maintenance now, we are preserving the remaining value of the orebody until it can be mined profitably to make a posi- tive contribution to the Paladin Group," Borshoff said. Mining operations at Kayelekera have already been suspended. Ore processing is continuing during a transitional run- down phase until reagents and consum- ables on site have been depleted and the production circuit has been emptied and cleaned. The plant then will be placed on care and maintenance. This rundown/ sterilization phase is slated for comple- tion in April or May. "Paladin remains committed to its vision of the long-term viability and strength of the nuclear sector and to its presence in Malawi," the Paladin state- ment said. "Paladin intends to maintain its presence in Malawi and to continue exploration activities in the country, with the objective of identifying and delineat- ing additional uranium resources in order to assure the long-term future of Kayelekera." Production at Paladin's Langer Hein- rich uranium mine in Namibia, which has a significantly lower cost profile than Kayelekera, will not be affected by the suspension of operations at Kayelekera. EMJ_pg04-27_EMJ_pg04-27 3/3/14 10:32 AM Page 6

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