By Larry Claasen
TORMIN Mineral Sands’ future is uncertain. The west coast based mining operation, which is owned by Mineral Sands Resources (MSR), has entered “business rescue” because of an oil spill near its operations.
The problems at the mining operation has had a global knock on effect, as it led to its Australian holding company request to have its shares suspended.
Mining group, Mineral Commodities (MRC) which holds 50% of MSR, asked the Australian Securities Exchange to suspend the trading of its shares on 31 July 2024. The remaining 50% of MSR is held by its empowerment partner, Blue Bantry Investments 255.
MRC said it had advised MSR to no longer provide funding to Tormin Mineral Sands following the interruption to its operations and revenue stream caused by the storms, which led to the MV Ultra Galaxy, ship carrying bulk ammonia, to run aground near its operations in early July.
MV Ultra Galaxy, which carried about 500 tons of fuel and oil, was later broken up by further bad weather, resulting in an oil spill halting mining operations.
The cloud over Tormin Mineral Sands future comes just months after MRC said it was in negotiation with another Australian mining company GMA Group to take ownership of the west coast mining operation.
On 10 May 2024, MRC announced it was in negotiation with GMA. The proposed deal would include a “standstill” in respect of the $10-million loan provided by GMA under a loan agreement executed in May 2023.
The key terms of the agreement would create a three month exclusivity period during which MRC will negotiate exclusively with GMA regarding a potential transaction for the sale of the Tormin mineral Sands Operation.
Under the then proposed agreement with GMS, Tormin would continue to operate as normal and generate revenue during this period. Discussions were also underway with GMA regarding a shortfall in a stockpile of garnet concentrate that GMA purchased in 2021.
In its statement on continuation of its share suspension on 19 August, MRC did not say whether it was still in negotiations with GMA, only saying it was in “discussions with various parties regarding the proposed funding of the company are ongoing and incomplete.”
Tormin Mineral Sands produces zircon, rutile, garnet, magnetite, and ilmenite concentrates.
