By Soyoung Kim and Michael Erman
NEW YORK Jan 29 DuPont is exploring the
sale of its cyanide business and has hired investment bank
Morgan Stanley to run the sale process, according to
three sources familiar with the matter.
The unit - which sells the poisonous chemical for use in
gold mining - could be worth more than $700 million, according
to two of the sources. It is projected to have earnings before
interest, taxes, depreciation and amortization of around $100
million, the sources said.
The 210-year-old chemical company is under pressure to focus
more on its food and agriculture products. It sold its car paint
unit last August to Carlyle Group LP for $4.9 billion in
DuPont Chief Executive Ellen Kullman is betting
drought-resistant AquaMax corn seed, Curzate potato fungicides,
Amylex beer enzymes and other food and agriculture products will
make DuPont's profit less subject to the ebbs and flows of its
commodity chemicals business, which include its cyanide unit and
its much larger paint business.
DuPont declined to comment. Morgan Stanley did not
immediately respond to requests for comment.
Cyanide is used to leach gold and copper from rock. The
process requires huge amounts of the chemical and is one of the
most popular ways to extract various precious and base metals
from rock ore. More than 2 billion pounds of cyanide are
produced annually in North America.
AngloGold Ashanti, for instance, filters the chemical
through a pile of mined ore at its Cripple Creek, Colorado,
mine. The liquid is collected after filtering, and gold is
skimmed off the top. Visitors to the mine are required to sign
waivers promising not to touch or drink cyanide.
Cyanide was used as a chemical weapon in World War One and
is also found in pesticides and some plastics. Mexichem
is a key DuPont competitor.
Sales of cyanide, which DuPont makes at a Memphis, Tennessee
facility, were "robust" in the first quarter of last year,
executives said at the time. And amid a disappointing
third-quarter 2012 earnings report last October - when more than
2 percent of the company's workforce was laid off - DuPont
singled out sales of cyanide as one of its "bright spots." [ID:
Shares of DuPont were down 13 cents, or 0.3 percent, at
$48.02 in late afternoon trading on the New York Stock Exchange.