SAUDI Arabia's National Titanium Dioxide, the world's second-biggest producer of titanium dioxide, has bid for Australian mineral sands producer Bemax Resources, valuing it at $A301.5 million.
National Titanium, or Cristal, offered 32¢ a share, a 45% premium to Bemax's last closing price, it said yesterday in a statement to the Australian stock exchange. Jeddah-based Cristal owns a 34.5% stake in Bemax and is its largest shareholder.
Cristal wants to gain control of Bemax to get supplies of mineral sands to complement its existing business in Western Australia. Titanium dioxide is used to whiten paints, plastics and paper.
"Cristal intends to use Bemax increasingly to supply feedstock to its existing Millennium operations in Western Australia," the company said in the statement. "This will enable value adding of minerals in Australia before export to overseas customers."
Bemax was unchanged at 22¢ on May 23, its last trading day. The stock has dropped 14% this year.
Cristal is majority owned by National Industrialisation, the Saudi petrochemical maker known as Tasnee. Its other shareholders are the state-owned Gulf Investment Corporation and Dr Talal Ali Al-Shair.
The Foreign Investment Review Board — already working overtime on applications from Chinese resource groups looking to buy local mining assets — has advised Cristal that it has no objections to the bid, which has a 90% minimum acceptance condition.
In 2006, the Brisbane-based company was the biggest producer of leucoxene, the sixth-largest producer of rutile and the seventh-biggest producer of zircon. The FIRB would have been relaxed about the bid because Iluka, the world's biggest mineral sands producer, remains in local hands.
Bemax's mineral sands operations are in the NSW portion of the Murray Basin.
Along with developments in Victoria and South Australia, the Murray Basin has become a major new supply of mineral sands.
Cristal arrived on the Bemax register when Bemax was suffering from commissioning problems at its NSW operations.
Cristal has since gone on to become a major global player in mineral sands thanks to its 2007 acquisition of the Millennium pigment business for $US1.3 billion ($A1.35 billion).
Bemax posted $16.2 million net profit for 2007.
