Exxaro sells Glen Douglas dolomite mine to Afrimat for R35m

May 4th, 2010
Coal-weighted JSE-listed resources company Exxaro is selling its Glen Douglas dolomite business to Afrimat for R35-million, the company said on Tuesday.
Exxaro's Glen Douglas dolomite business - which holds new-order mining rights - last year generated revenue of R114-million, representing 1% of Exxaro group revenue for 2009 financial year.
The Glen Douglas operation sold 1,2 million tons of material last year, which equates to 20,7% of Afrimat's current aggregates sales volumes.
Afrimat's first venture into industrial minerals is in line with the company's strategy of expanding into synergistic industries.
It is reported that Exxaro is not only exiting dolomite, but also zinc as well as suspending its Fairbreeze mineral-sands replacement project as part of a commodity strategy that puts a more intense focus on coal projects.
The 160-employee Glen Douglas opencast dolomite mine, near Vereeniging, sells metallurgical dolomite to steelmaker ArcelorMittal South Africa; commercial aggregates to nearby concrete product/construction industries and lime to the agricultural industry.
At the current production rate, the life of mine is estimated at more than 30 years.
The Glen Douglas business last year produced 371 000 t of metallurgical dolomite, 762 000 t of aggregate and 72 000t of lime.
Exxaro will retain operational and management control of the Glen Douglas mine until the competition authorities and the Department of Mineral Resources have approved the transaction.
Exxaro is aligning its resources to position itself for the release of optimal value to its stakeholders, Exxaro CEO Sipho Nkosi said.
Exxaro wants to increase its coal exports, develop downstream char and market coke opportunities; enlarge its iron-ore involvement; and enter the renewable energy field.
The effective date of the acquisition will be the last day of the month during which the suspensive conditions are met or waived.