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BHP hires Citi to investigate possible Temco sale

Keywords: Tags  BHP Billiton, Temco, silicomanganese, manganese alloys, Orion Corporate Advisory Servces, Citigroup, Alex Harrison

LONDON — BHP Billiton Plc has chosen Citigroup Inc. to help it investigate the possibility of selling its Temco manganese alloys smelter in the Australian state of Tasmania, a source familiar with the situation said.

Speculation that the London-based mining company might sell some of its manganese assets grew earlier this year as a result of a document put together by Melbourne, Australia-based Orion Corporate Advisory Services.

Orion’s document highlighted the possibility that the mining company might be interested in divesting part or all of its manganese business in order to shift its focus toward its core large, low-cost, scalable businesses such as copper, iron ore and coal.

But Orion was acting independently of BHP and was seeking to be appointed financial adviser to a potential acquirer of the business. New York-based Citibank’s role is different, in that it has been given a clear mandate by BHP, the source said.

“They have appointed Citi to find them a buyer, but only for the sale of Temco,” the source said.

Another source said BHP is not under pressure to sell any part of its business and suggested that no final decisions have been made about Temco.

BHP Billiton shut Temco in February, but restarted it after signing a new power deal, cutting costs and concluding that the smelter was viable (, May 22).

The smelter produced 267,000 tonnes of manganese alloy in 2011, up from 219,000 tonnes in 2010.

Earlier this year, Rio de Janeiro-based Vale SA sold its European manganese alloy smelters to Baar, Switzerland-based Glencore International Plc.

BHP declined to comment. Citi did not respond to a request for comment.

A version of this article was first published by AMM sister publication Metal Bulletin.

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