US building materials giant takes control of Jamaican mineral interests

US building materials giant Martin Marietta Materials has added Jamaican limestone, marble and bauxite interests to its international portfolio following its US$12.9-billion acquisition of Lhoist North America, bringing the Clarendon-based Chemical Lime Company of Jamaica Limited under the ownership of one of the largest producers of construction and industrial materials in the United States. The transaction, completed on August 21, gives Martin Marietta an indirect interest in mineral resources at Braziletto, Clarendon, where Chemical Lime holds two limestone quarry licences and separate mining licences for marble and bauxite. The Jamaican assets form part of a much larger acquisition through which Martin Marietta is seeking to expand its presence in high-value lime and industrial minerals. Jamaica’s inclusion in the enlarged group was confirmed in Martin Marietta’s third-quarter filing with the US Securities and Exchange Commission (SEC) on Wednesday, November 4. The country is now listed among the operating locations of the company’s Specialties business, which produces high-calcium lime, dolomitic lime and industrial mineral products for construction, manufacturing and other industrial applications. While the acquisition places Chemical Lime within a substantially larger international operation, Martin Marietta has not disclosed any specific plans to expand production or invest additional capital in Jamaica. It also remains unclear what contribution the Clarendon business currently makes to the group’s operations. The change in ownership nevertheless comes at a significant point in Martin Marietta’s expansion, as the company seeks to broaden its earnings beyond its traditional aggregates business and strengthen its position in industrial minerals. The acquisition of Lhoist North America gives Martin Marietta access to a network of 20 quarries and production facilities and 45 distribution terminals, serving industries including steel manufacturing, infrastructure development, heavy construction and environmental services. Martin Marietta Chairman and CEO Ward Nye described the transaction as a major development in the group’s growth strategy, with the acquired operations already contributing US$216 million in revenue between the August 21 completion date and the end of September. “The third quarter marked a defining milestone in Martin Marietta’s portfolio transformation with the completion of our combination with Lhoist North America (LNA) on August 21,” Nye said in the company’s latest earnings release. He said the transaction would strengthen the group’s Specialties business and broaden its exposure to industrial markets. Locally, the acquisition brings a change in the ultimate ownership of a company with longstanding interests in the island’s mineral resources. Chemical Lime, which was identified in 2015 as one of Jamaica’s four largest limestone developers, holds quarry licences ML 129 and ML 152 at Braziletto. Records from the Ministry of Mining and Geology also identify the company as the holder of mining licences associated with marble and bauxite in Clarendon. Changes have already taken place at the local company’s board level. Records from the Companies Office of Jamaica show that Lhoist North America CEO Mark Milner joined Chemical Lime’s board on July 1, replacing Lhoist Group CEO Dr Philipp Niemann, who resigned on the same date. Lhoist North America Treasurer Mark Fanning and Chemical Lime Managing Director Hugh Elliston are also listed as directors. The board changes preceded completion of the acquisition, under which Martin Marietta paid US$7 billion in cash and issued approximately US$5.9 billion in shares to acquire Lhoist North America. The transaction also resulted in Belgian-owned LNA Holding SRL becoming a major shareholder in Martin Marietta. The enlarged business is already making a considerable contribution to its new owner’s financial performance. Martin Marietta’s consolidated revenue climbed 28 per cent to US$2.37 billion for the July-to-September quarter, while adjusted earnings before interest, tax, depreciation and amortisation rose 21 per cent to US$808 million. Net earnings from continuing operations attributable to the company, however, declined 29 per cent to US$256 million. The company has since raised its full-year revenue outlook to approximately US$7.8 billion, reflecting the contribution expected from the newly acquired operations despite inflationary pressures and weaker demand in portions of its existing business. Its next phase of growth will involve integrating the Lhoist operations and improving efficiency across its expanded network of production facilities.