Hundreds to lose jobs in KZN as Motsepe-linked Assmang shuts down plant
Hundreds of people are set to be retrenched as the Cato Ridge Works (CRW) plant, operated by Assmang, shuts down.
Assmang is 50% owned by African Rainbow Minerals (ARM), founded by businessman Patrice Motsepe, and the remaining shares are owned by Assore, a South African-based mining company.
ARM announced on Monday that, after several talks, Assmang has resolved to permanently close the business and operations of CRW. 'Assmang is among the top ten producers of ferromanganese globally.'
Affected employees of Assmang
The Sens announcement by ARM stated that affected employees will be retrenched effective 31 August 2025.
'This decision has been reached after a comprehensive review of CRW's operational and financial position. Despite sustained efforts to explore alternatives to closure, the operation has continued to experience significant and unsustainable financial losses.'
According to Assmang's website, the company employs 358 permanent staff members and 193 contractors. It is not indicated how many employees will be affected by the closure of the CRW plant.
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Assmang's land to go on sale
The announcement also addressed how the assets of Assmang will be disposed of, which includes land, properties and houses in the Cato Ridge development company.
ARM stated that the board has approved the sale of certain land parcels, properties and houses to Assore SA PropCo, a wholly-owned subsidiary of Assore.
'The CRW complex will be remediated and, together with the vacant land, redeveloped into a commercial and logistics hub that, in the future, is expected to generate significant economic activity and employment in the area.'
The Cato Ridge transaction
According to the announcement, the Cato Ridge transaction will be completed in two phases.
'Phase 1: comprising of the purchase by Assore SA PropCo from Assmang of certain land and houses situated on or close to CRW, which will be developed by Assore SA PropCo, together with a sale by Assore SA PropCo of a portion of those properties to and for the benefit of certain host communities for no consideration.
'Phase 2: comprising of the sale and purchase by Assore SA PropCo from Assmang of the remaining land on which CRW is located.'
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How much will Assore pay
ARM added that Assore SA PropCo is set to pay R453 226 500 to Assmang for the purchase.
Assmang also held certain interests in Sakura Ferroalloys, a low-cost producer of manganese alloys.
'In addition to the transaction referred to above, Assmang, Assore SA, Sakura and ARM have entered into a sale agreement which provides (amongst other things) for the sale by Assmang to Assore of all of the shares in Sakura that are held by Assmang (being 54.36% of the issued shares of Sakura).'
How much is Motsepe set to benefit
According to ARM's announcement, the mine is set to receive R900 million after the transaction from Assmang.
'Following the closing of this transaction, Assmang is expected to distribute R900 million in cash to ARM.
'The risk and benefit of the Sakura Disposal shall pass to Assore SA with effect from the Effective Date of 1 July 2024, even though legal ownership will pass on the closing date. Assore will also procure the release of Assmang from any obligations arising out of any suretyship, guarantee, indemnity, security or similar agreement that Assmang has entered into for the benefit of Sakura.'
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