Tasnee signs deal to sell Jazan smelter to Tronox

Tronox’s acquisition of Tasnee’s Cristal — announced in February 2017 — has faced regulatory hurdles. (Courtesy, Tronox)
Updated 10 May 2018
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Tasnee signs deal to sell Jazan smelter to Tronox

  • Option agreement follows technical services agreement for building of Jazan facility
  • Titanium dioxide pigments are used in paper, paints and plastics.

DECODER: Titanium dioxide is a naturally occurring substance, mined in countries including Australia, South Africa and Canada. Titanium dioxide pigments are used in paper, paints and plastics.


Saudi industrial conglomerate Tasnee has signed an option agreement to sell a 90 percent stake in its titanium smelter in the south western city of Jazan to US-based Tronox.

The deal comes as a merger agreement between Tronox and Tasnee-subsidiary Cristal remains mired in regulatory turmoil.

Under the terms of the option agreement, signed between Tronox and Tasnee subsidiary AMIC (co-owned by Cristal), the US-based chemicals giant will acquire 90 percent of the Jazan-based titanium slag smelter facility, which has the capacity to supply up to 500 thousand tons (kt) of titanium dioxide slag and 220kt of pig iron.

The option agreement follows a technical services agreement between the parties, which will see Tronox provide technical assistance to AMIC to facilitate the startup of the smelter. Upon reaching the sustained operations of the facility, Tronox shall exercise its option to acquire the stake.

As part of the option agreement, AMIC will create a Saudi-incorporated SPV and contribute its ownership interest along with $322 million of debt currently held by AMIC. Tronox has agreed to lend AMIC and the SPV up to $125 million for capital expenditures and operational expenses — which may be drawn down on a quarterly basis as needed — to facilitate the start-up of the facility.

“By combining slagger operations expertise of Tronox with that of AMIC under the Technical Services Agreement, we will work together to ensure the successful commissioning and ramp-up of this world-class smelter in Jazan,” said Tasnee CEO Mutlaq Al-Morished in a statement.

The smelter agreement occurs against the backdrop of Tronox’s drawn-out bid to acquire Tasnee subsidiary Cristal, first announced in February 2017. Regulators in the US and Europe have opposed the acquisition — which would make Tronox the largest titanium pigment producer in the world — fearing the move would reduce competition in the market.

Tronox announced an extension to the acquisition agreement in March, and aims to complete the transaction by end-June.


Oman advises Dhofar businesses to close after Cyclone Mekunu hits

Updated 19 min 14 sec ago
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Oman advises Dhofar businesses to close after Cyclone Mekunu hits

DUBAI: Oman has advised all private sector establishments in Dhofar region to shut down for three days after Cyclone Mekunu hit the southern part of the Gulf Arab country.
The labor ministry declared a three-day holiday for companies and establishments in the private sector, state news agency ONA reported on Sunday.
The central bank issued a circular announcing a three-day holiday starting on Sunday for money exchange houses, banks, finance and leasing companies in Dhofar.
Cyclone Mekunu hit southern Yemen and the coast of neighboring Oman over the weekend, resulting in several fatalities.
Sembcorp Salalah Water and Power Co, which operates an electricity generation and seawater desalination plant in Oman, said its water production plant had been shut down temporarily because of rough seas because of a tropical storm.