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Asarco seeks compensation from Sterlite |
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Copper major Asarco has filed a lawsuit against one-time suitor Sterlite Industries for backing out of a US$2.6-billion deal to take the US copper miner out of bankruptcy in 2008, reports said. The company had filed for bankruptcy protection in 2005 as it faced workers' strike and more than US$1 billion of asbestos and environmental claims. Asarco exited the bankruptcy in December 2009 and is under the control of Mexican miner Grupo Mexico now. In a March 17 lawsuit, the company said that Anil Agarwal-promoted Sterlite, which is India's largest copper producer, had breached its purchase and sale agreement with the miner and forced it to spend more on attorney fees, marketing and other costs. Sterlite had bid US$2.6 billion for Asarco in May 2008 and was chosen by the Asarco management to sponsor the company's bankruptcy exit. But copper prices fell, and in October 2008, Sterlite withdrew that offer, saying it needed a substantial reduction in the price. That brought it into conflict with Grupo Mexico which was seeking to regain control of the subsidiary post-bankruptcy. Both Grupo Mexico and Sterlite entered another round of bidding with lower offers. Grupo Mexico eventually paid about US$2.5 billion to regain control of Asarco and repay its creditors in full. Sterlite officials were not available for comments. Even though Asarco emerged from bankruptcy in December, its contentious sale is still being fought in US courts. Sterlite in February appealed in a "higher court" in the US against the District Court order to hand over Asarco back to Grupo Mexico. The company had hoped to win a reversal of the ruling by the US District Court in Brownsville, but will have to now face the legal suit for backtracking from the promised deal. While working on the deal with Asarco, Sterlite had said the acquisition was in line with its strategy of leveraging its existing skills to become a diversified global copper producer and creating long-term value for its shareholders. |
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Copper to remain firm in 2010 |
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Lack of copper concentrate, stronger demand and the start of consumer restocking will help boost copper prices this year, Bank of America Merrill Lynch said. Bank of America expects copper to average US$7,275 a tonne this year from a previous forecast of US$7,125 a tonne in January. It expects copper prices to average at US$8,000 in 2011, unchanged from January. Destocking through the entire manufacturing supply chain is subsiding. Concentrates remain tight and mine supply will likely constrain refined output in the coming years. Higher end-user demand and outright restocking, both of which should become more critical this year. The bank expects the copper market to be balanced this year. That compares with an average forecast of a deficit of 23,000 tonnes. Most metal markets have seen prolonged deficits before the recession. As demand is now accelerating, we expect supply shortfalls to reassert themselves. Scrap supply is still not abundant for most metals. South Africa's platinum production will also likely remain well below previous peak production levels, which should give rise to market deficits in 2010 and 2011. |
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Sumitomo Metal to sign JV deal with Mitsui Mining |
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Sumitomo Metal Mining Co., Japan's second-biggest copper producer, and Mitsui Mining & Smelting Co. will set up a joint venture to make fabricated copper and copper-alloy products to cut operating costs, reports said. Mitsui Mining will spin off its rolled copper and zinc division to be merged with a unit of Sumitomo Metal Mining, the two companies said in a joint statement. The two companies will hold equal stakes in the integrated company, to be named Mitsui Sumitomo Metal Mining Brass & Copper Co. It will begin operations July 1. The venture may save 1 billion yen (US$10 million) a year and enhance competitiveness amid slumping demand, the statement said. The company will become the nation's biggest maker of brass strips, used in terminals and connectors for cars and electronics components. The company plans to supply high-end products to Asia's emerging markets, Mitsuhiko Hasuo, senior executive officer at Mitsui Mining said. The new company will produce 6,000 tonnes of brass strips a month. Brass strips are copper-alloy products comprising copper and 30 percent to 40 percent zinc. Japan's output of copper and copper-alloy fabricated products may climb 15 percent to 855,000 tonnes in the year starting from April 1, after tumbling to the lowest level in more than three decades, as the global economy recovers from the worst postwar recession, the Japan Copper and Brass Association said. Mitsui Mining, Japan's biggest zinc producer, set up MS Zinc Co., a joint venture company to produce refined metal, with Sumitomo Metal Mining in 2002. |
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Cabinet to discuss Hindustan Copper divestment soon |
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The public sector Hindustan Copper Ltd's follow-on public offer (FPO) could be one of the first public-sector companies' to hit the markets next financial year, reports said. The Department of Disinvestment has prepared a Cabinet note for divestment in the public sector mining company and the sale of 20 per cent stake in it may come up for approval soon. A finance ministry official said: "There has been some movement on the disinvestment in Hindustan Copper.” It has proposed dilution of 10 percent government equity in the company through offer for sale, while Hindustan Copper would raise fresh equity of the same quantity. Public issues of Satluj Jal Vidyut Nigam and Engineers India Ltd, likely to be introduced in the April-June quarter next year, have already been approved by the Cabinet. Steel Authority of India Ltd, Coal India and Bharat Sanchar Nigam Ltd could be the next in line. The mines ministry had cleared the proposal for Hindustan Copper's FPO last month after the company's board approved it in December 2009. The government currently holds 99.59 percent in the company. The company is expecting to raise about Rs 5,000 crore through the FPO and the money raised through fresh equity would support its expansion plans. The government is targetting around Rs 40,000 crore from divestment next year. |
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Chalco to phase out high-cost aluminium in three years |
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Aluminum Corp of China Ltd (Chalco) plans to phase out high-cost and outdated alumina and aluminium capacity in three years to help lift the company to profitability. Chalco, the world's largest aluminium producer by market value reported a worse-than-expected 2009 net loss of 4.64 billion yuan (US$679.7 million), its first full-year loss, as higher costs more than offset rising metals prices. The company, also known as Chalco, said that it would close more than 200,000 tonnes of aluminium smelting capacity and shut 1 million tonnes of alumina capacity. It said the closures were part of an ongoing restructuring programme to cut costs and were unlikely to affect production of primary aluminium and alumina used to make the metal, as it also planned to build new low-cost capacity. About 6.7 percent or 200,000 tonnes of its capacity will be closed by the end of next year. The company would switch part of its existing 2 million tonnes of old, high-cost alumina capacity to produce chemical grade alumina and could close the remaining 1 million tonnes in three years. Chalco has about 4 million tonnes of aluminium capacity and about 11 million tonnes of alumina capacity in China. The company said it planned to lift alumina output this year by more than a third from 2009's 7.78 million tonnes, and push up aluminium output by more than 15 percent from 3.44 million tonnes. It was building three alumina refineries in China with a total capacity of 2.3 million tonnes, company Chairman Xiong Weiping said. The company was also looking to build large aluminium smelters and alumina refineries in other countries with bauxite resources or rich energy supplies. Bauxite is an ore used to refine alumina. Self-produced bauxite accounted for about 66 percent of the company's consumption last year. The cost for self-produced bauxite was about 20 percent lower than that purchased from the market. |
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Aluminium products to become costlier in Orissa |
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As a measure to promote ancillary and downstream activities in the aluminium sector, the Orissa cabinet has decided to rationalise the value added tax (VAT) imposed in sale of aluminium products in the state. While some products were attracting four percent VAT, other items carried 12.5 percent VAT. In this backdrop, the cabinet decided to enforce uniform four percent tax on all categories of aluminium products. |
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Kazakhmys's profit falls 39 percent |
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Kazakhmys Plc, Kazakhstan's biggest copper miner, said profit slumped 39 percent last year after selling less of the metal as prices declined. Net income fell to US$554 million from US$909 million a year earlier, the London-based company said. Sales dropped 27 percent to US$2.4 billion. Earnings slid after Kazakhmys sold its copper for US$5,024 a tonne through the year, from US$6,714 a year earlier. Copper cathode output was 320,000 tonnes in 2009, the company said, after producing 378,100 tonnes a year earlier. |
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HCC gets Hindalco orders worth Rs 3 bn |
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Hindustan Construction Co Ltd said on Thursday it had won two orders worth about 3 billion rupees from Hindalco Industries for structural work at the latter's aluminium smelter project in Orissa.
The first project worth about 1 billion rupees will be completed in 19 months from the date of issue of the order. The second project worth 1.99 billion rupees will be completed in 15 months from the date of issue, HCC said in a statement. |
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Supply glut not to affect Australia's zinc production |
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A massive supply glut of zinc has not deterred Australia prospectors from scouring the world for new deposits as they bet that old mines going offstream and the global economic recovery will provide new demand, reports said. In locations as far-flung as Greenland, Algeria, Burkina Faso and the Australian outback, mine development plans are taking shape that hold the promise of more than 1 million tonnes of zinc in concentrate, one-tenth of annual world consumption and twice the amount parked in LME warehouses. At stake for the firms, which include Minmetals, Kagara, Ironbark, Terramin and an Australian arm of Belgium-based Nyrstar, is whether current high prices will give older mines a new lease on life or new supplies can be produced cheaply enough to prevent that possibility. Worldwide production restarts in the second half of last year and anaemic demand growth have already led analysts to beef up forecasts for the 2010 surplus in the zinc market. London Metal Exchange (LME) stocks - a supply source of last resort - have ballooned 56 percent to more than a half-million tonnes in the last year. January producer stocks alone climbed 16,200 tonnes over December to 946,400 tonnes, International Lead & Zinc Study Group figures show. Mine executives are undeterred by gloomy forecasts, counting on demand growth, production costs on average 20 percent below older mines and a drop in suppliers to underpin the future. They also expect increasing demand in Western Europe, forecast to rise 2 percent this year after plummeting 23 percent in 2009, and 3 percent in the United States following last year's 11 percent contraction. In 2009, LME zinc averaged US$1,595 a tonne, but so far this year has only dipped below US$2,000 once. The price is now around US$2,300 a tonne. A lot of the new zinc coming on will cost less to produce than older mines, making them more competitive and in a better position to capture market share. Credit Suisse suggests the world could require 6 million tonnes more zinc mine capacity by 2016 to balance supply and demand. That's a 60 percent increase in new mines. |
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Nalco sales aluminium at premium |
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India's state-run National Aluminium Co Ltd (Nalco) sold 9,000 tonnes of aluminium ingots at US$88 per tonne premium over the average LME cash price on a cost, insurance and freight basis, reports said. The buyer, Swiss trader Glencore, will be supplied six batches of 1,500 tonnes each of the metal from April to September, said the source. Nalco's sale prices are watched as they generally serve as an international benchmark. The firm last sold 3,600 tonnes of aluminium ingots at a premium of US$78 a tonne over the average LME cash price on a cost, insurance and freight basis on March 12. Meanwhile, the company has set eyes on to emerge as a reputed global company in the metals and energy sector with a turnover of Rs 25,000 crore by 2020, according to its 'Vision and Corporate Plan – 2009-2020'. Prepared by Gurgaon-based Management Development Institute (MDI), the Vision Plan hinges upon three key directions viz globalisation, diversification and growth to achieve its goal of an international player. The company is working on a plan to debottleneck its operations through globalisaiton through acquisition of downstream production facilities, smelting in low energy cost regions and acquisition of coal and other mines. For this the company plans to float a subsidiary, Nalco International. It also has been aggressively expanding its capacities in its mines, refinery, smelter and captive power plant. For the second phase expansion to be completed in a couple of months, a capex of around Rs 4400 crore was fully funded by internal accruals. As the vision plan, the company is to invest around Rs 58,000 crore from this fiscal till 2019-20 to implement several projects including third phase expansion (Rs 6980 crore). The third phase expansion will increase its capacity from 4.6 lakh TPY to 6.4 lakh TPY, alumina refinery strength from 21 lakh MT to 29.75 lakh TPY, bauxite mining from 63 lakh TPY TO 89.25 lakh TPY and captive power plant from 1200 MW to 1700 MW. The company plans to set up a Rs 16,000 crore green field smelter and CPP project at Jharsuguda in Orissa and a Rs 5,600 crore alumina refinery at Visakhapatnam in Andhra Pradesh. |
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Australia's Kwinana nickel refinery re-opens |
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BHP Billiton Ltd., the world's biggest mining company, said its Kwinana nickel refinery in Western Australia restarted operations March 26 after an 11-day unscheduled shutdown because of a hydrogen gas shortage. However, assessment is yet to be done whether the refinery is running at full capacity or whether nickel shipments have resumed as normal. Hydrogen gas is a key ingredient in the process of refining nickel. BHP's Nickel West operations, which include the Kwinana refinery, a smelter in Kalgoorlie and a concentrator at Kambalda, produced 59,400 tonnes of nickel concentrate in the six months to December 31. Nickel, used to strengthen steel, has more than doubled in London in the past year because of demand from China, the world's fastest-growing major economy. The refinery was shut March 15 after BHP's own hydrogen plant at the site experienced 'problems' and alternative sources for the gas weren't available. BHP is in the process of designing and constructing a new hydrogen plant at Kwinana, scheduled to be completed 2011. Nickel matte that was produced from BHP's Kalgoorlie smelter during the shutdown will be shipped in its unrefined state. |
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Vedanta may spin off aluminium business |
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NRI billionaire Anil Agarwal-led Vedanta Resources is likely to demerge its aluminium division, reports said. The new firm will be the world's fourth biggest aluminium player, behind Russia's United Company Rusal, America's Alcoa and China's Chalco. The report said the mining major is ready to begin 'a massive break-up of its business with the demerger of its US$20 billion (13 billion pounds) aluminium division'. Under this restructuring, Vedanta intends to spin-off five or six businesses, which include zinc, iron ore and power, though it would retain controlling interests in all of them. The report added that once a confusing share-ownership structure is cleaned up, the business would then start trading in Mumbai, with a secondary listing to take place in either London or New York. Only about 10 to 15 percent of the company would be listed, raising up to US$3 billion. The initial public offering should take place by the end of the year, with even June considered a possibility if the legal process is completed quickly. Vedanta Resources' aluminium interests have a 'potential value of US$20 billion; the overall group is only worth about US$11.3 billion, but the complicated conglomerate model leads to some investors shunning the stock'. Vedanta Resources and its advisers, including Morgan Stanley, Credit Suisse and JP Morgan Cazenove, believe that simplifying the ownership structures of the subsidiaries would make the overall group more valuable. After aluminium, Vedanta's Zambian copper business is expected to be spun-off. Vedanta also has copper operations in Australia and India. |
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Manganese outlook for 2010 |
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ion in production of crude steel on a global scale in 2009 pursued the Manganese market. The world output of crude steel in 2009 was 1,220 million tonnes decreasing by 8 percent compared with that in 2008, and Japan produced 87.53 million tonnes of crude steel in 2009, which had a considerable decrease of 26.3 percent compared to that in 2008.The output of crude steel in Europe and the USA in 2009 also had a large decline and only China increased their production of crude steel in 2009 by 13.5 percent to 568 million tonnes but this expansion of the production in China was diluted by a reduction in production of crude steel on a worldwide scale. The reality in the western world had been felt as the output of crude steel in 2009 decreased by approximately 30 percent from that in 2008. This was an unprecedented case.
Manganese ferroalloys are consumed to produce steel but had been troubled with a decline of its demand caused by a depression of the steel market. However, the accumulation of Manganese ferroalloys made in a prosperous time of 2007 to 2008 became a cushion and all producers in the western countries were able to avoid bankruptcy. However, the distributors concerned had suffered in 2009 from the stocks arisen from excessive imports. These excessive stocks of Manganese ferroalloys had been mostly adjusted to a reasonable level in October to December quarter of 2009 but some of major trading companies in Japan had to reckon up an appraised loss of the stocks and were driven to be distressed together with a fall of prices for Manganese ferroalloys in the international market. Since the excessive stocks of Manganese ferroalloys had been reduced to a normal level as mentioned above, the actions to commence from the beginning of 2010 will become a new starting point for trading companies. |
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Monroe named SVP at Metal Technologies Inc. |
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Metal Technologies Inc., the Indiana-based ferrous foundry group, has named Douglas Monroe as its new senior vice president of operation. Monroe has been President and General Manager of MTI's Foundry at Three Rivers, MI, and now will oversee that operation as well as plants at Auburn, IN, and Ravenna MI.
MTI's gray and ductile iron castings are supplied to automotive, small gasoline engine, appliance, trailer, truck, compressor, and construction markets.
“Doug's success as President and General Manager at Three Rivers will lead to increased sharing of best practices and foundry knowledge among all of our people. We are both confident and enthusiastic about his leadership abilities,” said MTI President Matthew Fetter. Monroe has had a long career in metalcasting with positions of increasing responsibility at Buick Foundry in Flint, MI, and Bostick Foundry in Lapeer, MI, before joining the former Dock Foundry (now MTI) in Three Rivers in 1973.
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Pace buys Del Mar's zinc diecasting unit |
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Pace Industries has acquired Del Mar Industries' zinc diecasting division for an unreported price. Del Mar operates zinc and magnesium diecasting at a plant in Gardena, CA, and aluminum diecasting at Los Angeles Die Casting Co. in Commerce, CA.
Fayetteville, AR-based Pace Industries is North America's largest aluminum diecaster, and already has zinc diecasting plants in Harrison, AR, North Billerica, MA, and St. Paul, MN.
Last year, Pace Industries closed an aluminum and zinc diecasting operation in Monroe City, MO. In 2008, Leggett and Platt Inc. sold Pace to Kenner Industries, which had previously sold the diecasting chain to L&P in 1996. |
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Court approves Neenah's DIP financing |
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A federal bankruptcy court has approved US$140 million in debtor-in-possession financing for Neenah Enterprises Inc., the foundry holding company that filed a Chapter 11 claim on February 3. The package includes a US$50-million term loan and a US$90-million revolving credit line. Neenah stated the money would finance its normal operations and working-capital requirements as it reorganises.
According to Neenah Enterprises President and CEO Robert E. Ostendorf Jr., the approval is “a critical milestone in our efforts to quickly emerge from bankruptcy protection with a significantly improved balance sheet.”
Neenah Enterprises Inc. is a holding company for several gray and ductile iron foundry operations, including Neenah Foundry Co., in Neenah, WI; Advanced Cast Products in Mercer, PA; Dalton Foundry in Fort Wayne, IN; and Deeter Foundry in Lincoln, NE. Its products serve municipal and various industrial markets.
When Neenah Enterprises filed for bankruptcy it declared assets valued at US$286.6 million and debts totaling US$449.1 million as of September 30, 2009.
The filing was accompanied by an agreement in principal with several “key creditor constituencies” in a plan to reduce overall debt by approximately US$220 million while promising 100 percent recovery for suppliers and vendors.
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Vedanta to raise US$775 ml via bonds |
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London-listed Vedanta Resources, controlled by billionaire Anil Agarwal, will be offering convertible bonds worth US$775 million (about Rs 3500 crore) to refinance its loans at easier interest rates.
The bonds, with a maturity period of seven years, will have a coupon rate of 3.5-4 percent and a conversion premium of 35-40 percent. Vedanta, in a statement said the money will be used to refinance debt redemptions and for other general corporate purposes.
“Priority in allocation of the bonds will be given to the existing shareholders,” the statement said. Volcan Investments, Anil Agarwal's investment company, has indicated that it will not participate in the deal.
Sale managers JPMorgan Cazenove and Morgan Stanley have an option to buy another US$75 million of convertible bonds, pushing the issue size to as much as US$850 million if fully exercised.
Vedanta had in July last year raised US$1.5 billion through an ADS issue to fund expansion, acquisitions and increased stakes in subsidiaries.
Sterlite Industries, a subsidiary of Vedanta, in October last year raised US$500 million through notes that were convertible into American depositary shares to fund its Tuticorin expansion project. Notes offered by Sterlite have a maturity date of October 30, 2014, and carry an interest rate of 4 percent per annum. |
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Banks commit over Rs 10,000 cr to Hindalco plant |
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Hindalco Industries, India's largest aluminium maker has received a loan commitment of over Rs 10,000 crore from more than 10 banks for the Rs 4,900-crore debt the company plans to raise for its Utkal Alumina Refinery — a 1.5-million tonne per annum (mtpa) project in Orissa.
The debt syndication was launched in the third week of December by Hindalco's bankers, SBI Capital Markets, IDBI Bank and ABN Amro. “More than 10 banks, including State Bank of India (SBI), have given a commitment to the debt proposal of the company,” said a banker familiar with the development.
The formalities of the debt syndication would be completed by the end of next week, the banker added.
Canara Bank, Bank of Baroda, Bank of India and IDBI Bank are some of the other banks that have given a similar commitment to lend to the company for the project.
Since the commitment is for an amount that is more than required, the debt sought could be proportionately distributed among the banks.
The refinery is expected to start production from July 2011 and the order for machinery has been placed. It involves an estimated Rs 6,500 crore of planned capital expenditure, 25 per cent of which is being put up as equity by the company, while the rest is being raised as debt.
The company is raising a term loan against the project for 10 years. Such financing is usually called 'project finance' in banking parlance. The interest rate for the loan is going to be 11.25 percent — slightly lower than the prime lending rate of SBI at 11.75 percent.
The company has capital expenditure plans of over Rs 23,000 crore for the next three years, including other new plants in Orissa, Madhya Pradesh and Jharkhand.
Hindalco plans to fund 30 percent of its total capital expenditure through equity infusion and internal accruals. It raised Rs 2,900 crore by selling fresh equity in a qualified institutional placement in November. It is now tying up the debt component for the projects.
Its revenue for the last financial year was Rs 65,414 crore, while net profit was reported at Rs 485 crore — down from Rs 2,193 crore in the previous year. This was primarily due to the Canadian subsidiary, Novelis, which reported a Rs 8,769-crore loss.
The subsidiary is expected to make Rs 5,000 crore of operational profit from the financial year 2012-13, according to the company estimates given in the annual general meeting a few months earlier.
In Madhya Pradesh, the company is setting up Mahan Aluminium, a complex of smelters and a thermal power plant with capacities of 359,000 tpa and 900 MW, respectively. This is also expected to commence production in July 2011. Bankers said this project would be the next one to achieve financial closure after the Utkal Alumina one. |
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BALCO has encroached 650 acres of land: Minister |
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UBharat Aluminium Company Ltd (BALCO) has encroached about 650 acres of government land at Korba town in Chhattisgarh, the state assembly was informed.
'BALCO has illegally encroached about 650 acres of government land but Chhattisgarh High Court had recently given its rulings in favour of BALCO. The state government is yet to take a view whether it should move the Supreme Court or not,' Revenue Minister Amar Agrawal told the assembly in reply to a question by Leader of Opposition Ravindra Choubey.
Vedanta Resources Plc, a London Stock Exchange listed company, has 51 percent stake in BALCO while the remaining 49 percent is held by the central government.
Korba is based some 240 km from state capital Raipur " |
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BALCO has encroached 650 acres of land: Minister |
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Bharat Aluminium Company Ltd (BALCO) has encroached about 650 acres of government land at Korba town in Chhattisgarh, the state assembly was informed.
'BALCO has illegally encroached about 650 acres of government land but Chhattisgarh High Court had recently given its rulings in favour of BALCO. The state government is yet to take a view whether it should move the Supreme Court or not,' Revenue Minister Amar Agrawal told the assembly in reply to a question by Leader of Opposition Ravindra Choubey.
Vedanta Resources Plc, a London Stock Exchange listed company, has 51 percent stake in BALCO while the remaining 49 percent is held by the central government.
Korba is based some 240 km from state capital Raipur. |
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Copper miners Quadra and FNX to merge in a US$1.5b deal |
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In another consolidation move in the Canadian mining industry, copper miner Quadra Mining Limited (Quadra) has agreed to a friendly merger with rival FNX Mining Company Inc (FNX) through a stock swap deal that would create a leading intermediate copper producer with a market capitalisation of US$3.5 billion.
The combination, termed as 'a merger of equals' has been unanimously agreed to by the boards of both the companies, and the combined entity will be known as Quadra FNX Mining Limited (Quadra FNX).
Under the terms of the deal, each FNX share will be exchanged for 0.87 Quadra shares. On completion of the transaction, existing Quadra shareholders will own approximately 52 percent of the new company while the remaining 48 percent will be owned by FNX shareholders, a statement said.
Vancouver-based Quadra is a resources company whose major assets include the Robinson mine in Nevada, producing copper and gold, the Carlota copper mine in Arizona, and the Franke copper mine in northern Chile. Its development projects are Sierra Gorda copper-molybdenum mine in Chile and the Malmbjerg molybdenum mine in Greenland. Toronto-based FNX is a producer and developer of various minerals including copper, nickel, cobalt, platinum, palladium and gold and its primary assets are located in the prolific Sudbury mining camp in Ontario. The company has a strong balance sheet, zero debt and imminent production growth plans focused on higher margin, copper-precious metal ores, including the emerging, high grade Levack Footwall Deposit.
Paul Blythe, the present CEO of Quadra who will take over as the CEO of the combined entity said that the merger of Quadra and FNX is a springboard transaction that creates a leading intermediate copper producer with financial strength, a solid asset base, and an experienced and entrepreneurial management team.
The combined entity will have a strong balance sheet of US$580 million in cash and investments and US$50 million in debt. The total revenue estimated for 2011 is around US$1.5 billion and EBITDA is approximately US$765 million. Quadra executed an agreement with China's Stage Grid International Development Limited (SGID) to form a US$2-billion joint venture company for copper mining in Chile. Following the merger, SGID will invest directly into the JV which will be jointly owned by Quadra FNX and SGID.
Although the companies do not expect any rival bid for FNX, both the companies decided for a C$40 million break fee under certain circumstances, and also agreed to honour each other's right-to-match a competing offer.
The board of Quadra FNX will consist of five directors from Quadra and five from FNX and the new company will continue to operate from both Vancouver and Toronto.
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