Itochu to Acquire Stake in Ivanhoe Nickel Subsidiary

Jun. 7 -- Japanese trading firm Itochu Corp said on Friday it agreed to acquire an 8 percent stake in Beales Ltd, which controls the Platreef platinum and nickel project in South Africa, for about $280 million.

Beales is a subsidiary of privately-held Ivanhoe Nickel & Platinum, headed by well known mining financier Robert Friedland.

Ivanhoe Nickel & Platinum is also partly owned by Ivanhoe Mines (IVN.TO), which is developing the massive Oyu Tolgoi copper-gold project in Mongolia.

Last year, Itochu had already acquired a 2 percent stake in Beales for about $10 million. The latest investment will take Itochu's stake in Beales up to 10 percent, the company said.

The Platreef project is located adjacent to Anglo Platinum's Mogalakwena Mine. Itochu said it believes the project can be developed into a major underground mine that will produce platinum group metals (PGMs) that are widely used as catalysts to clean exhaust gas from cars.

The deal gives Itochu the right to acquire 10 percent of the project's output, once it goes into production.

"By participation in this project, Itochu has acquired production off-take rights, proportional to its participation, thereby helping to secure PGM resources for Japan and increasing its interests in the resources sector," the company said.