New WMC king of the sand pit

The hunt for a joint venture partner comes as the company seals a deal to move to full ownership of the deposit, the world's single biggest deposit of the titanium oxide ilmenite, by buying out South Africa's Southern Mining Corporation in a $US87.5 million ($155 million) share and cash deal.

The acquisition from SMC had previously been flagged and means that WMCR can push back the project's development timetable by more than two years, with first production now expected in 2007. It is then that WMCR believes that the pigment feedstock market will be better able to absorb Corridor Sands output.

It was also confirmed yesterday that Alumina, the alumina-specific company created along with WMCR on the demerger of the ``old" WMC, would be helping its financially weaker sibling to complete the first tranche of the two-tranche deal with SMC.

WMCR and Alumina will pay the first tranche of $US62.5 million by each issuing 14.08 million shares or 1.265 per cent of the issued capital in each company.

The final tranche of $US25 million will be paid in either shares or cash by WMCR alone.

WMCR's chief executive-elect, Andrew Michelmore, defended Alumina's first-tranche gift to WMCR, saying it simply reflected timing difficulties in the SMC negotiations brought on by the fact that the demerger of WMC into the two new companies did not go live until tomorrow.

He said WMCR had not yet made a decision on a joint venture partner and the size of equity it could be offered. But he did say that WMC's alumina industry experience with Alcoa over 40 years provided cultural acceptance that ``you get the best person to run the operations".

On the decision to push back a commitment date for the project, Mr Michelmore said it was important to ``grow into the market with demand. Don't be production pushed, be customer pulled," he said.

WMCR's acquisition cost of Corridor Sands just about matches SMC's market price on the Johannesburg market, although it is up by 70 per cent on its value before negotiations for the acquisition by WMCR were first made public at WMC's demerger meeting two weeks ago.

Under the agreement, the Industrial Development Corporation of South Africa retains an option to acquire a 10 per cent interest in Corridor Sands.

Mr Michelmore said Corridor Sands would be a ``fundamental building block of growth and value for the new WMCR".

The stock continued its advance yesterday, surging 18c to $4.26.

Alumina wore the cost of its gift by falling 1c to $4.70.