One of Ukraine’s biggest and most aggressive business groups strengthened its control over the global ferroalloy market by winning a prized Australian manganese miner in a fierce fight
zed Australian manganese miner in a fierce fight with a rival.
On Jan. 3, Ukrainian billionaire Genadiy Bogolyubov of the Privat Group won Consolidated Minerals in a hard-fought bid. The last four months have demonstrated the group’s acute desire to do anything to secure control of the lucrative manganese miner, the biggest in Australia. In December last year, Bogolyubov upped the ante to $1.1 billion and outbid a rival offer by Pallinghurst Resources, a London-based private equity fund.
According to media reports, the camera-shy Bogolyubov now controls more than 232 million shares, or 90.02 percent of ConsMin. Privat’s acquisition of ConsMin signifies the largest takeover by a Ukrainian business group since Independence.
The bidding war for Consolidated Minerals started in February last year, but Privat only entered the game in late August through its offshore vehicle Palmary Enterprises. The fight for ConsMin came at a time of increasing demand for natural resources and a flurry of takeover activity in the mining sector.
Eugene Cherviachenko, an analyst at Kyiv-based investment bank Concorde Capital, said that the takeover of ConsMin by Privat enables the Ukrainian business group to broaden its access to high-quality raw materials for the production of ferroalloys.
“Under the current production volumes of manganese ore and ferroalloys at Privat’s plants, the business group secured enough supplies for its own production for the next fifteen years.” In 2006, ConsMin produced some 888,000 tons of manganese, equivalent to 10 percent of annual high-grade world production.
The Privat group currently controls much of Ukraine’s ore and ferroalloy business and holds interests in factories in Russia, Poland, Romania and the US.
