Outokumpu has decided to exercise its option to acquire a 20% stake in the Talvivaara nickel mining project company for a total consideration of one euro. Outokumpu will also subscribe shares in the initial public offering of Talvivaara Mining Company Ltd, the parent company of the project company. The size of the subscription will be decided upon later.
Based on a strategic choice, Outokumpu has divested its mining business, except for the Kemi chromite mine, which is an integral part of the Group's stainless steel operations. As part of the exit-mining program, Outokumpu sold the Talvivaara exploration project in 2004 for one euro to what is now known as Talvivaara Mining Company Ltd. In the agreement between the two companies Outokumpu retained an option to acquire a 20% free carried interest in the project company for the sum of one euro. Outokumpu has also been granted an option to subscribe shares in a possible share offering by Talvivaara Mining Company Ltd, the parent company for the project, with a 20% discount to the offering price, representing up to 5% ownership in the company after the offering. As Talvivaara now intends to list on the London Stock Exchange and has started a share offering, Outokumpu has decided to exercise both options as described above.
The offering, together with a previously arranged project financing facility will secure financing for the Talvivaara project and enable its development into an operating mine. Outokumpu's ownership in the project and the parent company does not call for participation by Outokumpu in further financing of the project.
Outokumpu supports and endorses the project for strategic reasons as it will increase the availability of nickel on the world market and therefore improve its market balance. Nickel is an integral and currently the most expensive alloying element in stainless steel. The participation can also be seen as partial nickel hedge for Outokumpu.
For further information, please contact:
Eero Mustala, SVP - Corporate Communications
Tel. +358 9 421 2435, mobile +358 40 504 5146
eero.mustala@outokumpu.com