Petmin will then pass on those shares to its shareholders in the form of a special dividend.
(READ MORE: Petmin HEPS up 29 per cent)
Petmin is a diversified mid-tier mining company and owns a third of Northern Atlantic Iron Cooperation (NAIC), and will accelerate its investment based on the project’s technical and economic viability.
Muskrat Minerals Incorporated (MMI), in turn, is expected to list on a major Canadian Stock Exchange with a secondary listing on the JSE.
The JSE listed [DATA PET:Petmin Limited] says its move to unbundle some of its iron ore and investing in MMI was meant to offer shareholders the value of geographically diversifying into a different commodity suite.
Bradley Doig, business development director of Petmin, said the company was finding business palatable in the United States due to production costs.
Doig noted that Petmin looked at the American market from the energy cost perspective.
“We looked at a business that can take low grade inputs and manufacture high quality pig iron,” Doig explained.
“We looked at the competitive advantage of doing business in America and we found out that there the country had low energy production cost in the world with the advent of natural gas.”
American markets require about five million tonnes of pig iron a year principally imported from Brazil, Russia and Ukraine.
Doig added that Petmin was also impressed by conducive environment in America, due to a number of tax incentives offered coupled, with government guarantees on funding.