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EXX - Exxaro Announces Outcome Of Current Business Review And Trading Statement

Release Date: 01/12/2009 15:00:02      Code(s): EXX
EXX - Exxaro Announces Outcome Of Current Business Review And Trading Statement 
EXXARO RESOURCES LIMITED                                                        
(Incorporated in the Republic of South Africa)                                  
(Registration Number:  2000/011076/06)                                          
JSE share code:  EXX                                                            
ISIN code:  ZAE000084992                                                        
ADR code:  EXXAY                                                                
Diversified resources group Exxaro Resources Limited (Exxaro) announced today   
that it has completed a review of its existing business, commodity portfolio and
growth pipeline.                                                                
The review was undertaken against the background of the current economic climate
and the need to align existing resources and cost structures with a prioritised 
commodity strategy best positioned to release optimal value for all             
Exxaro and its subsidiaries ("the Group") plan to reconfigure the Group`s zinc  
assets with a view to ultimately divest from them in a manner that takes into   
consideration an optimal timetable allowing for maximum value release for all   
stakeholders.  The current portfolio of zinc assets includes the Zincor refinery
in Springs, Gauteng, a 50,04% interest in the Rosh Pinah zinc and lead mine in  
Namibia, a 26% interest in Black Mountain Mining (Pty) Ltd which owns the Black 
Mountain zinc and lead mine and the Gamsberg zinc project in the Northern Cape, 
and an effective 22% interest in the Chifeng zinc smelter in China.             
The zinc assets account for some 2% of the Group`s net assets and 10% of revenue
respectively. The Group has put in place a programme to effect the above and    
will accordingly provide regular updates.                                       
As a result of the impact on the Group brought about by the current economic    
climate, commitments to large capital projects as well as the current medium-   
term outlook of the mineral sands industry, the Group has decided not to proceed
with the planned development of the Fairbreeze mineral sands mine in KwaZulu-   
Natal. The Group will accordingly plan for the closure of the KZN Sands         
operations during the next five years while in parallel investigating feedstock 
alternatives and the continuation of the business should market conditions      
improve substantially.                                                          
This decision not to develop the Fairbreeze mine will necessitate a review of   
the carrying value of the KZN Sands operation as at 31 December 2009 which will 
in all probability result in a significant impairment of the carrying value of  
the asset by up to R1 500 million.  This in turn will have a negative impact on 
attributable and headline earnings per share for the year ending 31 December    
2009 which at this stage cannot be quantified with reasonable certainty.        
Headline earnings will also be impacted by the reversal of previously raised    
deferred tax assets which cannot be added back in the calculation of headline   
earnings per share.                                                             
The Group`s business strategy remains to focus on achieving operational         
excellence as a diversified resources business, to streamline management and    
cost structures, maximise cash flow and ensure availability of sustaining and   
environmental capital.                                                          
"We have undertaken a thorough review and prioritisation of our capital         
expenditure and project pipeline to optimally position the Group in the current 
economic climate," said Sipho Nkosi, Exxaro`s chief executive officer.          
The Group will intensify its growth efforts on its carbon-related project       
pipeline which includes major projects in the Waterberg such as the Grootegeluk 
mine brownfields expansion to supply Eskom`s new Medupi power station, the      
Thabametsi greenfields development as well as the Moranbah South joint venture  
with Anglo Coal in Australia.  The Group also intends exploring opportunities in
the ferrous, energy and reductants markets.                                     
"The latest measures provide a balance between our commodity and project        
portfolios and our longer-term growth aspirations. Our ongoing review of the    
business with particular emphasis on cost and balance sheet structures will     
ensure that we remain optimally positioned to meet all stakeholder              
expectations," said Nkosi.                                                      
The information in the above statement has not been reviewed nor reported on by 
Exxaro`s external auditors.                                                     
Editor`s Note:                                                                  
Exxaro is one of the largest South African-based diversified resources groups,  
with interests in the coal, mineral sands, base metals, industrial minerals and 
iron ore commodities.                                                           
Wim de Klerk                                                                    
Financial Director                                                              
Tel: + 27 (0) 12 307 4848                                                       
Mobile: +27 (0) 82 652 5145                                                     
Email: wim.deklerk@exxaro.com                                                   
1 December 2009                                                                 
Deutsche Securities (SA) (Proprietary) Limited                                  
Date: 01/12/2009 15:00:01 Supplied by www.sharenet.co.za                     
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