Ashurst advises Deterra Royalties on demerger from Iluka Resources

Iluka is primarily an international mineral sands company, with expertise in exploration, project development, mining operations, processing and marketing. Earlier this year, Iluka announced its intention to demerge its Mining Area C royalty business by establishing a separate ASX-listed Australian royalty company, Deterra.  

Deterra is positioned as Australia's leading listed royalty investment company, and its cornerstone asset is the royalty over the BHP-operated Mining Area C iron ore operation (which has generated revenue of A$929 million since inception) (MAC Royalty). Deterra aims to replicate on the ASX the listed royalty investment business model that is well established in North America by growing and diversifying its royalty portfolio by making value accretive investments over time, leveraging the high quality MAC Royalty as its cornerstone asset. 

Iluka shareholders approved the demerger at a general meeting of Iluka shareholders on 16 October 2020. Deterra was listed on the ASX on 23 October 2020, and on 2 November 2020 the demerger was implemented by a distribution of shares in Deterra. 

Iluka has retained a 20% minority interest in Deterra (which Iluka regards as a long term investment) to provide Iluka with economic exposure to the production growth associated with BHP's development of South Flank and the potential for continued growth through future expansions, extensions, developments and discoveries within the MAC Royalty Area; as well as Deterra's longer term growth strategy.

Co-lead partner Roger Davies commented:

"We are delighted to have assisted with this strategically significant transaction, by advising Deterra Royalties in connection with its demerger from Iluka and separate ASX-listing, a transaction which has culminated in the establishment of Deterra as Australia's leading listed royalty investment company."

The Ashurst team comprised partners Roger Davies, Antonella Pacitti and Lorenzo Pacitti, who were assisted by senior associate Christopher Barry and lawyers Jacob Carmody, Benjamin Thomas and Amy Saunders.