South Africa: Exxaro Sells Zinc Asset To Glencore

VENTURES AFRICA – South African mining giant Exxaro has completed the sale of its 50.04 percent stake in Rosh Pinah Zinc to Swiss-based commodities trader Glencore.

Reports indicate that the sale of Rosh Pinah, Exxaro’a co-owned mining operation in Namibia, comes as the mining giant plans to streamline its core mining operations which will work in will work in the company’s favour in the long-term.

According to Exxaro CEO Sipho Nkosi, the company’s decision to sell Rosh Pinah formed part of the company’s plans to divest from zinc, due to what it described as “difficult conditions” borne out of high electricity costs, as well as the effect of the exchange rate on operating margins.

The Rosh Pinah deal is valued at R931 million ($110 million). It is, however, subject to final adjustment for net debt and working capital changes.

Mr Nkosi also disclosed that the company plans to sell other zinc operations which includes a 26 percent stake in the Black Mountain zinc and lead mine, as well as Gamsberg zinc project in South Africa’s the Northern Cape.

It also holds 22 percent stake in China’s Chifeng zinc smelter. According to the company’s website, the group continues to seek appropriate buyers for these assets.

Moving forward, Exxaro is now focused on developing the Mayoko iron-ore project in the Democratic Republic of Congo. The project which is estimated to have the capacity to produce 5-million tons a year, is poised for acquisition after 74 percent of shareholders approved the coal miner’s cash offer for the company.

The company also announced yesterday that the New York Stock Exchange listing of its merged mineral-sands operations with those of Australian-based Tronox would take place next week.

Exxaro is the largest domestic mining company in the South Africa, with operating facilities and offices in Africa, Asia, Europe and Australia.