MiningNews.net understands the three partners in AGR Matthey – Newmont Mining, UK refiner Johnson Matthey and the WA government’s Gold Corporation – made an amicable decision to part ways late last month.
Under the terms of the deal, which MNn understands is still to be finalised, Gold Corporation will take sole ownership of the gold and silver refinery in Perth, Johnson Matthey will take ownership of the platinum and silver brazing alloys business in Melbourne, and Newmont will exit the business completely.
A Newmont spokesperson told MNn confidentiality provisions in the dissolution agreement prevented the company from disclosing details of the deal, but said that Newmont would receive a cash payment as consideration for its share of the business.
He said Newmont had decided to exit the business as it was a “non-core” part of the company’s operations, and said the US-based company had no current plans to build a rival refinery in Australia, having signed a long term contract with the Perth refinery for its Australian and New Zealand production.
Gold Corporation chief executive Ed Harbuz told MNn the deal was still not completed, with negotiations still going on over conditions for the transfer of one of the businesses.
But he did say he expected Gold Corporation to acquire the local company that holds the Perth refinery’s assets when the deal was eventually closed, and that Gold Corporation would operate the business as a going concern.
While details of the terms of the dissolution are yet to be fully thrashed out, Harbuz said he didn’t expect the JV dissolution to constitute a break in business for the organisation – meaning that current refining contracts will continue unchanged.
That will be an important assurance for local gold miners, as the Newburn refinery, near Perth’s international airport, processed almost all the gold refined in Australia last year, as well as significant tonnages produced in surrounding nations. The refinery also has a small but significant business in reprocessing gold jewellery.
Last year the refinery generated a pre-tax profit of around $22 million for the joint venture partners after processing more than 430 tonnes of gold for export.
MNn understands that all of the Perth-based refining staff have been assured of their jobs, but no decision has yet been made about the fate of AGR Matthey’s local administrative staff.
Background
The Perth Mint and refinery was founded in 1899 and was operated by the WA government for most of the last century.
In 1998, the mint's refining and precious metals businesses were merged with those of Golden West (Australasia) to form the Australian Gold Refineries Joint Venture. Golden West then sold its 50% interest in the AGR JV in 2001 to Newmont subsidiary Australian Gold Alliance, and in 2002 the JV and Johnson Matthey (Aust) merged their respective Australasian businesses to create AGR Matthey.
Gold Corporation and Newmont each hold 40% of the refining business, with Johnson Matthey holding the remaining 20%.
