Due Diligence of Oman-based Mineral Processing License Holder

Due Diligence of Oman-based Mineral Processing License Holder

Commodity – Chrome, Limestone, Gypsum, Manganese
Country – Oman
Regions – Middle East

Due Diligence of Oman-based Mineral Processing License Holder
Our client had identified a JV opportunity with an Oman based chrome ore miner. The owner also secured concessions for mining limestone, gypsum and manganese ore and obtained licenses and the approvals for ferro-chrome plant, chrome ore beneficiation plant, limestone  calcination plant and limestone micronization plants. Our client was interested undertaking a scoping study for these business units and recommend him the next course of actions.

We performed the following tasks for the client:

  • Study the information and reports shared by the client in details
  • High level geological assessment of the mines and regions
  • Future prospect of the minerals from invest point of view
  • Assessment of ore quality and requirement of processing of ores
  • Availability of ready infrastructure, requirement to build new infrastructure and cost associated with this
  • Valuation estimation and identifying investment options
  • Rationale for investing in Oman – country study
  • Identifying gaps between the required information and information shared
  • Identifying potential risks in investing in the projects

The study was jointly delivered by our market analysis team and mineral processing team who have relevant experience in ferro-chrome operations and Middle East market. Although we found Oman
as an attractive destination for mining and processing of the said minerals, we found considerable gap in the basic information shared by the prospective seller. The low scale of operation in the proposed projects is not commensurate for our client particularly for commodities like limestone where margin is low. Since no reserve and production data was shared, there happened to be risk of very low amount of resource left in the properties. Infrastructure was another impediment. The nature of stake sales in upstream and downstream projects was also not clear. Geovale recommended the client to seek more information from the vendor based on a questionnaire. We also suggested the client for field due diligence and exploration which is necessary to measure resources available for production prior to official acceptance of investment snapshot.