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South African mining group Exxaro Resources Limited has signed an agreement to acquire coal mining assets belonging to French oil company Total for US$472mn
According to the agreement, Exxaro Resources Limited will acquire a 100 per cent stake in Total Coal South Africa (TCSA), the company’s coal-producing affiliate.
However, the completion of sale is subject to approval by relevant South African authorities, a Total statement added.
Phillipe Sauquet, president of Total gas and power, said, ”This sale is part of the group’s 2012-14 asset sale program and is in line with Total’s objectives to focus on its core activities.”
While the company has made necessary investments to accelerate TCSA’s growth in the medium term, the French multinational believes TCSA will have the opportunity to maximise its long-term potential with a new strategic coal investor like Exxaro Resources Limited, which is South Africa’s second-largest coal producer, with interests in iron ore and base metals as well.
TCSA operates three coal production complexes in the Witbank and Highveld Coalfields and has a majority interest in a significant project located in the same area. It is also a shareholder in the Richards Bay Coal Terminal — the largest coal export terminal in the world.
In 2013, TCSA’s sales of high quality thermal coal were 4.5mn tonnes, of which 95 per cent was exported to markets like India and China, making TCSA the fifth largest coal exporter in South Africa.