S.Africa's Exxaro eyes export quotas held by troubled Optimum coal mine

S.Africa's Exxaro eyes export quotas held by troubled Optimum coal mine
The logo of South African coal mining company Exxaro is seen outside the company's Pretoria headquarters
By Tanisha Heiberg

JOHANNESBURG (Reuters) - South Africa's Exxaro Resources Ltd said on Thursday it was interested in buying coal export quotas from the Gupta family's Optimum Coal mine that is now in business rescue proceedings.

Chief Executive Mxolisi Mgojo made the comments as he announced Exxaro's results that showed an impairment charge had driven down full-year earnings by 65 percent, despite an improving operating profit.

Mgojo said Exxaro was not interested in Optimum's mining assets but rather the "prize" would be its quotas for exporting coal through the Richards Bay Coal Terminal (RBCT). Exxaro exported 7 million tonnes of coal in 2017.

Optimum Coal mine, which has faced a strike by its workers over unpaid salaries, sought protection from creditors on Feb. 20 with seven other companies owned by the Guptas who are accused of corrupt ties to former President Jacob Zuma.

Zuma and the Gupta brothers deny any wrongdoing.

Shares in the coal producer fell 1.4 percent at 125.30 rand by 1129 GMT, on the back of the 4.339 billion rand ($364.83 million) impairment and despite the 17 percent rise in operating profit to 6.060 billion rand.

The impairment relates to replacing its economic empowerment vehicle used to boost the level of black shareholders in Exxaro.

"The coal business benefited from higher selling prices and volumes while the group's results were impacted by various once-off transactions," Exxaro said in a statement.

The coal producer also benefited from selling its stake in U.S. titanium products company Tronox.

Exxaro declared a final dividend of 400 cents per share, compared with 410 cents last year.

($1 = 11.8933 rand)

(Reporting by Tanisha Heiberg; Editing by Ed Stoddard and Edmund Blair)

First Published: 2018-03-08 09:48:00
Updated 2018-03-08 15:32:21

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