Malaysia Smelting Corp unit to acquire Asas Baiduri to boost tin mining output

MALAYSIA Smelting Corporation (MSC), one of the world’s largest tin producers, has proposed an acquisition of Asas Baiduri Sdn Bhd (ABSB) via its wholly-owned subsidiary RHT.

The proposed deal entails RHT’s acquisition of 250,000 ordinary shares in ABSB, representing the company’s entire equity interest, from Tin International Sdn Bhd.

The consideration for the proposed acquisition will comprise 272,250 new ordinary shares in RHT, representing 20 per cent of its enlarged share capital, MSC said in a bourse filing on Friday (Jun 3).

MSC said the purchase consideration was arrived at one a willing-buyer, willing-seller basis, taking into account, among other factors, the valuation range for 1 million RHT shares of between RM664.5 million (S$208 million) and RM721.4 million (as at Feb 28, 2022), as well as tin resources currently held under RHT’s and ABSB’s parcels of land.

Following the acquisition, ABSB will become a wholly-owned subsidiary of RHT and part of the MSC group, while RHT will become an 80 per cent owned subsidiary of MSC.

RHT is principally engaged in tin mining on 7 mining leases for an area of about 701 ha in Klian, Perak. ABSB is engaged in the business of mining and related activities, and has been granted a mining lease over land parcel of about 568 ha, with a lease until June 2033, also in Perak.

ABSB’s land parcel is located in the immediate east of RHT’s.

MSC said the proposed acquisition is expected to contribute to its operation and future performance as ABSB’s land provides new sites for additional tailings ponds or storage, as well as waste rock storage.

RHT would also then able to expand its mining pit further eastward, which will allow it to mine additional resources currently unavailable, of up to 2,690 tonnes in volume and RM184 million in value, according to MSC. RHT could also benefit from the potential tin resources within ABSB land, of up to 1,200 tonnes and monetary value of up to RM82 million.

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“Following the increase in tin prices in recent years, the prospects for the tin industry remain positive, buoyed by major technological advancements occurring around the globe,” MSC said, noting also that tin is a critical element in the production of electronic goods.