Gencor succeeds in Billiton bid

South Africa’s Gencor mining house has acquired Royal Dutch-Shell group’s metals and minerals arm, Billiton, for US$1.2 billion.

The new resource group is to be called Billiton International and will be controlled by Gencor, Agence France Presse reports from Johannesburg. In Canada, Billiton’s assets include the wholly owned copper-zinc-silver-gold Selbaie Mines operation near Joutel, Que.

Gencor said the funding for the transaction would be achieved without the transfer of any funds from South Africa. A big stumbling block in negotiating the 14-month deal had been South Africa’s stringent foreign currency laws. Gencor is to contribute US$335 million in cash, mainly through disposal of its offshore assets, while a consortium of international bankers is providing long-term debt facilities of US$430 million, plus an additional US$170 million in revolving credit.

The Shell group has agreed to subscribe for an issue of exchangeable bonds to a nominal value of US$300 million.

Gencor would also add its interests in South African-based Richards Bay Minerals and the Brazilian-based Sao Bento gold mine, valued at US$420 million, to the Billiton assets.

The greater part of Billiton International’s assets, valued at more than US$1.5 billion, are bauxite and alumina, which Gencor would use to feed its new 466,000-tonne Alusaf aluminum smelter.