Elementos (ASX:ELT) has signed an agreement to acquire a 50% interest in Iberian Smelting, owner of the Robledallano tin smelter in Spain.
Robledallano, which is licensed and in operation, was previously operated as a lead shot smelter and a lead-acid battery recycling plant. It was acquired by CRM Synergies, which holds a 90% interest, in 2021 and had a new rotary furnace installed and commissioned in 2022 to process tin.
The facility can operate 24 hours a day, seven days a week, and currently processes materials at a rate of 600 tonnes per month.
Under the two-staged non-binding term sheet, Elementos, through its wholly owned Spanish subsidiary, will pay a €500,000 ($811,840) option fee, €700,000 to acquire 30% from existing shareholders, and make a further €2 million capital injection into Iberian Smelting to take its shareholding to 50%.
Elementos, which has a market capitalisation of $24.34 million, says the acquisition provides a development pathway to become the “first vertically integrated mine-to-metal tin producer within the European Union”.
Managing Director Joe David says the tin smelter has disclosed environmental permits, including emissions release, water use and waste management licences.
“The facility has already had significant capital invested into it, with the current rotary furnace only installed in 2022,” he says.
“The completion of this transaction will be significant and will drive several key economic, strategic and political benefits to the company. Establishing a vertical integrated (mine-to-metal) supply chain within Europe, which will propel Elementos down the value chain from a tin concentrate miner to a tin metal producer.
“European buyers currently pay premiums around US$700-750 per tonne (12-month average) to the published LME prices to buy delivered metal predominantly from Asian based smelters. These premiums are forecast to continue to exceed the treatment and refining charges, let alone the other costs associated with transporting, financing, and insuring concentrate consignments to Asian based smelters.”
CRM Synergies Director Manuel Alonso Lopez says the plan to jointly own Iberian Smelting with Elementos, as well as operate Robledallano, is mutually beneficial.
“Partnering with a future producing tin miner like Elementos, via Iberian Smelting, will allow us to grow further and secure a larger market share of the growing tin market.”
Iberian Smelting owns the tin smelting and refining facility, near the town of Robledallano in the Extremadura region of Spain.
Elementos has projects in Spain and Australia, including the Oropesa Tin Project in Andalucia, Spain which is touted to be one of the world’s largest undeveloped, open cut mineable tin deposits.
An optimisation study estimates the mine could produce 3,350 tonnes of tin each year.
Elementos is undertaking a Definitive Feasibility Study and finalising environmental permitting to advance Oropesa to development.