- Mineral Commodities (MRC) has settled its recent dispute with GMA Garnet over stockpiled material at the Tormin Mineral Sands Operation in South Africa
- Early last month, US-based GMA Garnet claimed MRC’s stockpiling protocols, breached the companies’ original offtake agreement
- Under the terms of the settlement, GMA will receive the whole 750,000 tonnes of currently stockpiled material from Mineral Commodities
- In exchange GMA will pay MRC a total of US$16.7 million (approximately A$22.93 million) over two tranches
- Despite the dispute, the companies have now negotiated a new non-exclusive offtake agreement to supply 100,000 tonnes of garnet material annually, which will begin in 2021 and has an initial term of three years
- Mineral Commodities closed 17.9 per cent in the green for 33 cents per share
Mineral Commodities (MRC) has settled its recent dispute with GMA Garnet over stockpiled material at the Tormin Mineral Sands Operation in South Africa.
Previously, both companies had an ongoing offtake agreement for the supply and purchase of the site’s garnet production. However, US-based GMA Garnet recently lodged a dispute over MRC’s stockpiling protocols, claiming they breached the original agreement.
After receiving a termination notice early last month regarding the alleged breaches, MRC promptly ended the original offtake agreement to focus on settling the dispute.
Under the terms of the settlement, GMA will receive the whole 750,000 tonnes of currently stockpiled material. In exchange GMA will pay a total of US$16.7 million (approximately A$22.93 million) over two tranches.
Despite the dispute, the companies have now negotiated a new non-exclusive offtake agreement to supply 100,000 tonnes of garnet material annually, which will begin in 2021 and has an initial term of three years.
As part of the new agreement the transportation of the site’s production will be moved to GMA’s Saldanha stockpiling facility.
Executive Chairman of MRC, Mark Caruso, was pleased the companies could come to a settlement and thanked GMA’s new executive management for their efforts in resolving the matter.
“The settlement of these matters and the reinvigoration of our commercial relationship with GMA allows our company to move forward with certainty as to our rights and obligations with our key offtake partner during these globally uncertain times with increased flexibility in our supply–side options for the sale of our product mix,” he said.
Mineral Commodities closed 17.9 per cent in the green for 33 cents per share.