Czech firm buys Chemours’ mining business
Draslovka, a multi-family-owned Czech speciality chemicals firm, has agreed to acquire the Mining Solutions business of Chemours for $520 million, or 10 x EBITDA in 2020. This came shortly after its agreement to buy Sasol’s sodium cyanide business $101.7 million. CEO Pavel Bruzek said that the deals were “highly synergistic” with each other.
The acquisition of Mining Solutions is Draslovka’s first major investment in the US and will give it a presence on three continents. Mining Solutions operates the largest solid sodium cyanide plant in the world in Memphis, Tennessee, and has a market presence in Mexico, Canada and South America.
According to Draslovka, the integration of its own technological expertise with Chemours’ customer support and services “provides a stable and growing business with solid margins and a roster of strong customer relationships, including a number of the world’s top global mining companies”. The deal should close in Q4, subject to regulatory approval.
Draslovka has been active in hydrogen cyanide (HCN) production for over 100 years and specialises in fully synthetic and highly purified liquid HCN. This is used, following downstream processing, in multiple industries, notably mining and agriculture, but also pharmaceuticals, biocides, coatings and others.
For Chemours, CEO Mark Newman said that the sale furthers its strategy of focusing on core businesses. The company has four main divisions: Titanium Technologies, Thermal & Specialized Solutions, Advanced Performance Materials and Chemical Solutions.
In this context, Chemours recently broke ground at a $93 million mining facility in Clay County, Florida, to deliver concentrated deposits of titanium and zircon mineral sands used to produce its Ti-Pure brand of TiO2. Construction will begin in July for a projected start-up in Q4.
The Sasol deal also includes plans to invest a further $50 million to modernise and expand the site at Sasolburg and bring it up to Draslovska’s environmental standards. It should close in 1H 2022. Navuka Investment Holdings, a black women-owned company with existing investments in mining, will take a 25% plus one share stake.
Draslovka has existing production and services facilities in the Czech Republic, Australia, New Zealand and India, plus Stellenbosch-based Draslovka Services South Africa, which was formerly known as Agri-Soil. This was its first major investment in manufacturing Africa and Bruzek said that it “represents the first step on our global ambitions to take Draslovka to the next level”.
Sasol described the sale as part of its “ongoing, strategy-aligned, asset divestment programme”. This grew out of an “expedited review of the business to consider how it can be most effectively positioned to be sustainable in a low oil price environment” and has made good progress despite macro-economic uncertainties, according to CEO Fleetweood Grobler. The company will continue to supply Draslovka with key feedstocks, utilities and site services on an “arm’s length basis”. It added that it intends to “explore the potential for business development opportunities by Draslovka, which could result in further synergies at the site”.