OM Holdings in Malaysian land deal

Manganese miner OM Holdings has entered into a RM65.5 million ($20.9 million) agreement to acquire land in West Malaysia for a sintering and smelting plant.

The deal, struck by OM's wholly-owned subsidiary OM Materials, will see the company take a 60 year leasehold on 40 hectares on land in the Johor Bahru district.

The land lies in a newly established industrial zone, and is 5 kilometres from a 40,000 tonne capacity cargo port.

OM said the establishment of the plant was designed to coincide with expected production increases at the Tshipi manganese project in South Africa, which the company owns a 13 per cent share in.

OM, which is currently in the process of a dual-listing on the Hong Kong stock exchange, plans to fund the acquisition using a balance of 20 per cent cash flow and reserves, and 80 per cent debt financing.