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.


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
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Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.