JOHANNESBURG (miningweekly.com) – Diversified miner Xstrata has completed the sale of two Mpumalanga collieries to black economic-empowered (BEE) group Imbawula, for an undisclosed amount.

The transaction had effect from January 1, seeing Imbawula acquiring, as going concerns, the Spitzkop and Tselentis openpit and underground mining operations, all supporting infrastructure, including land, movable assets, buildings and coal beneficiation plants.

Imbawula also acquired prospecting and mining rights in the area, which support the long-term operation of this business.

All affected Xstrata Coal employees would be transferred to Imbawula and the represented unions have been consulted, the miner said in a statement on Thursday.

“I believe this transaction is a positive outcome for Xstrata Coal, Spitzkop and Tselentis employees and the operations’ many stakeholders. We have a long and established relationship with the executives and shareholders of Imbawula.

“I am pleased that we transferred ownership of these two collieries to a growing coal producer. Imbawula gained a highly competent team of employees and the company has an ongoing commitment to working responsibly and safely,” Xstrata Coal COO Murray Houston said.

He added that from Xstrata’s perspective, the disposal of these assets allows it to focus on the company’s core portfolio of large production complexes, including the ongoing development of the existing and future resource base.

Imbawula directors Pius Mokgokong and Yacoob Mansoor said the acquisition was a “compelling and natural fit” for the group, which owns various other coal mines in the region.

“We have an established management team in place and this transaction will deliver significant synergies for our group over a relatively short time frame,” the directors said in a statement.

Mokgokong and Mansoor believed that the acquisition supplemented the company’s resources to support its core business, which is the supply of coal to Eskom, by exposing it to the export coal market.

Xstrata Coal will buy export coal from Imbawula over a ten-year period at a market-related price.

Xstrata Coal agreed to assist Imbawula during a transition period to ensure a smooth handover of the various aspects related to the business, including accounting systems, procurement and payroll functions, and other key issues including information technology and information systems processes.

Xstrata Coal will also continue its HIV/Aids community work in the region, including the completion of a new community clinic in Breyten.

The required approvals for the transaction from the Competition Tribunal and the Department of Mineral Resources have been obtained.
 

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