TASNEE announced that Advanced Metal Industries Cluster Company Limited (AMIC), a subsidiary of TASNEE (owned equally by Tasnee and Cristal) enters into an Option Agreement with Tronox Limited (Tronox) , a global mining and inorganic chemicals company, In accordance with the Option Agreement, Tronox shall acquire 90 percent of AMIC ownership in a world-class titanium slag smelter facility (the Slagger) which has the capacity to supply up to 500kt of TiO2 slag and 220kt of pig iron, located in the Jazan City for Primary and Downstream Industries in the Kingdom of Saudi Arabia.

The execution of the Option Agreement has followed a Technical Services Agreement between AMIC and Tronox, whereby Tronox provides certain technical assistance to AMIC to facilitate start-up of the Slagger.

As part of the Option Agreement, AMIC will create a special purpose vehicle (SPV) incorporated in the Kingdom of Saudi Arabia. Upon reaching the sustained operations of the Slagger as defined within the Option Agreement, Tronox shall exercise the option to acquire a 90 percent ownership of the SPV.

The total consideration payable by Tronox consists of the effective assumption of the AMIC external debt of $322 mln through ownership in the SPV, the $125 million loan, a working capital adjustment and an adjustment to compensate AMIC for 10 percent of the outstanding liabilities of the SPV as of the closing. AMIC and Tronox have also agreed that they will enter into a shareholders agreement relating to their respective rights and obligations as shareholders of the SPV.

(By combining slagger operations expertise of Tronox with that of AMIC under the Technical Services Agreement, we will work together to ensure the successful commissioning and ramp-up of this world-class smelter in Jazan. The strategic intent of the Option Agreement and Technical Services Agreement is to globally enhance vertical integration and capture significant synergies between TiO2 pigment production and TiO2 feedstock production after the closing of Tronoxs merger with Cristal for the benefit of TASNEE shareholders), said Mutlaq H. Al-Morished, CEO of TASNEE.

Note that TASNEE owns 79% of Cristal and will announce any material developments pertaining to the transaction in due course.