SARAJEVO (Bosnia and Herzegovina), February 23 (SeeNews) – Bosnian company Steelmin has repaid in full the loan it borrowed from UK-based mining company Red Rock Resources to complete the refurbishment and recommissioning of a ferrosilicon smelter in Jajce, Bosnia, Red Rock said.
Red Rock lent 4.3 million euro ($5.3 million) to Steelmin in June last year, and in exchange it took a 17% stake in the Bosnian company, Red Rock said in a filing with the London Stock Exchange earlier this week.
Red Rock now controls 22% of Steelmin, which forecasts first production at the Jajce factory to begin in April 2018.
Steelmin intends initially to produce ferrosilicon containing 75% silicon and 25% iron, a product primarily used as a deoxidising agent. A by-product of ferrosilicon production will be microsilica, which is a dust used in the manufacture of speciality concretes in the construction industry as well as in advanced refractories and ceramics.
Furnace V is expected to produce 29,000t of ferrosilicon per annum as well as 5,800t of microsilica, Red Rock explained.
Over time Steelmin is expected to produce both ferrosilicon as well as additional silicon alloys.
Red Rock noted it will now repay $3.0 million in full settlement of its obligations to the institutional investors that provided the back to back financing for its loan to Steelmin.
"The successful unwinding of these back to back arrangements leaves Red Rock in a solid financial position. We now hold at no net cost a key stake in an emerging European ferrosilicon producer. We look forward to updating the market on further developments as they occur", said Andrew Bell, chairman of Red Rock.
The Steelmin plant and facility, formerly part of Electrobosna, was originally built in the 1970s by Elkem, a major silicon and alloy producer based in Norway. It was closed down in 1992 due to the war in Bosnia, was then privatised and the six furnaces were sold off in two separate parts in 2000.
The plant was brought back online until finally being shuttered again in 2004 due to increasing exports pressure from Chinese producers.
Steelmin acquired it in 2011 and now plans to restart ferrosilicon production.
($=0.812742 euro)