Brisbane’s Metro Mining Limited is in line to become the new owners of Gulf Alumina after Gulf’s board unanimously recommended that its shareholders accept Metro’s offer.
The approval of Metro’s offer by Gulf’s board is the penultimate step in Metro’s bid to acquire the firm. Metro began the process of acquiring Gulf in December and was considered a logical move by experts in light of the fact that Gulf’s Skardon River project crosses Metro’s Bauxite Hills operations at Cape York near Weipa. Metro began by acquiring 22% of Gulf’s shares to make it the firm’s largest single shareholder. Metro subsequently increased their ownership in Gulf to 39% of its outstanding shares.
Metro overcame a surprise bid by Perth’s Moly Mines Ltd. Suspended from trading on the Australian Stock Exchange for over two years, Moly submitted an unexpected bid in September. Metro quickly responded by offering a superior bid, prompting Moly to revise its own offer that was judged today by the board to be inferior to that submitted by Metro.
“The combination of Metro and Gulf’s projects is not only important for Metro shareholders it is of vital importance to traditional owners, the local economy and State and Federal Governments. Our sights are firmly set on getting the project operational as soon as possible,” said Metro Mining CEO Simon Finnis.
Assuming Gulf’s shareholders ratify the agreement, Metro will become Cape York’s largest independent bauxite mining operation. Metro’s reserves of direct shipping ore will double, increasing from 48 million metric tons to 96.5 million metric tons. The merger is also estimated to save Metro up to A$200 million in overhead costs. In addition, Metro will also benefit from the mining leases and infrastructure held by Gulf Alumina.
Metro Mining is based in Brisbane, and began life when it was spun off from Cape Alumina Ltd. upon its takeover by MetroCoal Ltd in 2014. The firm has exploration rights in over 500 square miles of western Cape York, which is second to only Rio Tinto Alcan. Its primary asset is its Bauxite Hills Project, which is expected to yield up to four million metric tons per annum.