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Highveld Agrees to Disposal of Vanadium Assets

04/29/2008 - Evraz Group’s Highveld Steel and Vanadium Corp. enters definitive agreements with Vanchem Vanadium Products (Proprietary) Ltd. on Highveld’s disposal of certain vertically integrated vanadium assets.

Evraz Group SA announced that Highveld Steel and Vanadium Corp. has entered into definitive agreements with Vanchem Vanadium Products (Proprietary) Ltd. on Highveld’s disposal of certain vertically integrated vanadium assets. 
 
Evraz had committed in 2007 to procure the disposal as a condition to the European Commission’s and South African competition authorities’ approval of the company’s acquisition of a majority interest in Highveld.
 
Under the new agreements, Highveld will dispose of:
 
  1. Class A ordinary shares in the issued share capital of Mapochs Mine (Proprietary) Limited, a special purpose company that has been incorporated by Highveld for purposes of acquiring and holding its Mapochs Mine. Rights attached to the Class A ordinary shares are limited to rights required to enable Vanchem Vanadium to protect its rights under the fines ore supply agreement.
  2. The corporation’s Vanchem operations.
  3. The corporation’s 50% shareholding in South Africa Japan Vanadium (Proprietary) Limited.
 
Highveld has also entered into supply agreements with Vanchem Vanadium for the supply of certain volume of fines ore from the Mapochs Mine, which cannot be used by Highveld in its steelworks, and for the supply of certain volumes of vanadium-bearing slag, which is produced by Highveld as a by-product of steel, both at market-related prices.
 
Highveld has agreed to sell the above three assets for an aggregate consideration of US$160 million, which will be discharged by the immediate payment of US$100 million in cash, and by the buyer’s commitment to undertake specific environmental projects in relation to Vanchem.
 
Implementation of the disposal is subject to certain conditions, including approvals of the European Commission, South African competition authorities, and the JSE Limited.
 
Highveld Steel and Vanadium Corp. is a subsidiary of Evraz Group.
 
Vanchem Vanadium Products (Proprietary) Ltd. is a special-purpose company controlled by Duferco Investment Partners Inc.