EXXARO RESOURCES LIMITED - Exxaro concludes disposal of new Clydesdale collieryRelease Date: 03/02/2014 17:18:00 Code(s): EXX
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
EXXARO CONCLUDES DISPOSAL OF NEW CLYDESDALE COLLIERY
Diversified South African-based resources group Exxaro Resources Limited (?Exxaro?)
announced today that it has concluded a sale of assets agreement (?the Agreement?)
relating to its New Clydesdale Colliery (?NCC?) with Main Street 1201 Proprietary Limited
(?Main Street?) (to be renamed Universal Coal Development VIII Proprietary Limited),
Universal Coal plc (?Universal Coal?) and Universal Coal and Energy Holdings SA
Proprietary Limited (?Transaction?). The Transaction is not a categorised transaction in
terms of the JSE Limited Listings Requirements.
In terms of the Agreement, once all conditions precedent to the Transaction have been
fulfilled, a cash amount agreed will be paid to Exxaro. The most material condition
involves a section 11 approval required in terms of the Mineral and Petroleum Resources
Development Act (?MPRDA?) in respect of the transfer of the new order mining right from
Exxaro Coal Mpumalanga (Pty) Ltd to Main Street. Further details will be released to the
market in due course.
A tender sale process started in April 2013 following a decision to dispose of NCC, based
on an Exxaro review which concluded that the mine was not strategically aligned to the
group?s strategy. NCC has been generating a negative-margin and the life of the mine has
shortened beyond the profile that suits Exxaro?s investment profile. However, under the
new ownership of Universal Coal further opportunities can be extracted through exploiting
synergies with its contiguous operations.
Following extensive consultation with the unions and employees of NCC, a successful
section 189 process was concluded in terms of the Labour Relations Act. Of the 371 NCC
employees, 296 have been redeployed within the Exxaro group and 40 were retrenched
or retired. Exxaro has subsequently placed the mine on care and maintenance, with about
35 people employed for this purpose, until the fulfillment of all the conditions precedent
and the Transaction becomes unconditional and the operation is handed over to the new
Universal Coal is an Australian Stock Exchange-listed junior coal mining company which
owns the Roodekop reserve adjacent to NCC. Universal Coal has commenced with the
development of the Kangala Coal Project which is the flagship asset to produce 2,1
million tonnes per annum of thermal coal in the first half of 2014.
NCC is situated near eMalahleni in Mpumalanga province. In 2012 the mine produced
717kt of steam coal, primarily for the export market. Coal is mined using both open-pit
and underground methods.
The Transaction remains subject to the fulfillment, or to the extent possible, the waiver of
suspensive conditions of transactions of this nature such as the Competition Commission
approval and the Ministerial consent in terms of section 11 of the MPRDA.
Exxaro is one of the largest South African-based diversified resources groups, with
interests in the coal, mineral sands, iron ore and energy markets. www.exxaro.com
Executive Head: Strategy & Corporate Affairs
Tel: +27 12 307 4481
Mobile: +27 83 417 6375
3 February 2014
Deutsche Securities (SA) Proprietary Limited
Date: 03/02/2014 05:18:00 Supplied by www.sharenet.co.za
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