Sojitz signs MOU for 5% stake in Vietnamese tungsten producer
The proposed share purchase has a price floor linked to an earlier US$2.5 billion valuation, with Japanese distribution agreements also planned.
Theo Marchetti
Sojitz Corporation TYO2768, listed on the Tokyo Stock Exchange, signed a memorandum of understanding on Monday to acquire 5 per cent of a Vietnamese tungsten producer. The Nov. 9 announcement sets a price floor tied to an earlier investment that valued the producer at US$2.5 billion.
Sojitz shares closed higher at ¥4,916 in Tokyo at 3:30 p.m. JST on Monday TYO2768, according to Google Finance.
The seller would be a wholly owned subsidiary of the producer's controlling shareholder. That shareholder would retain control after the proposed transaction, according to the Nov. 9 release.
The MOU also envisages long-term commercial agreements for Sojitz to distribute the producer's tungsten and fluorspar products in Japan. Definitive agreements are targeted by the end of 2026, subject to due diligence and customary approvals.
Price Floor Follows October Investment
The producer's Oct. 1 completion notice said The Elmet Group Co. NASDAQELMT had completed the purchase of a 4.99 per cent stake. That transaction implied a US$2.5 billion equity valuation.
Applying that valuation to a 5 per cent stake would imply US$125 million. This is a calculation from the disclosed valuation, rather than a fixed consideration announced for Sojitz.
The proposed Sojitz purchase is a transfer of existing shares. The Nov. 9 release does not describe a subscription for newly issued shares or announce investment proceeds payable to the tungsten producer itself.
"The parties expect to sign definitive agreements by the end of 2026, subject to due diligence and customary approvals," the Nov. 9 release said.
Japanese Distribution Terms Await Agreements
The Nov. 9 release says Sojitz will market tungsten to Japanese semiconductor customers and industries including AI infrastructure, aerospace, energy and automotive manufacturing. The proposed commercial agreements also cover fluorspar.
The release gives no Japanese supply volume, delivery timetable, exclusivity provision or take-or-pay commitment. It describes the distribution agreements as arrangements still to be entered into alongside the proposed equity investment.
The October transaction had a different stage and disclosed supply terms. The producer said on Oct. 1 that its multi-year tolling and supply agreements with Elmet had taken effect, covering approximately 1,250 tonnes of tungsten trioxide annually for more than eight years.
Those volumes belong to the Elmet agreements. They are not disclosed terms of the proposed Japanese distribution arrangements.
The producer's operating platform includes Vietnam's Nui Phao mine and a Thai Nguyen refinery that processes its own concentrate and third-party feed, according to the Nov. 9 release. The company targets filing for a Ho Chi Minh City Stock Exchange listing in 2027.
Read more: Allegiance Resources completes acquisition of three British Columbia tungsten projects
The next transaction milestone is the targeted signing of definitive agreements by the end of 2026. The Nov. 9 release gives no separate completion date.
