Johannesburg - Diversified resources group Exxaro intends to go ahead with its new black economic empowerment (BEE) structure, despite the ongoing discussions between the mining industry and government over the new draft mining charter.
Exxaro chief executive Mxolisi Mgojo yesterday said the group would create a new BEE scheme later this year when its current empowerment shareholding structure reaches the end of its 10-year term in November. Mgojo said the replacement BEE transaction was likely to be less than 50 percent.
“We are engaging with our existing BEE shareholders as the ultimate size of a replacement transaction will depend on the size of their level of reinvestment,” he said.
Affordability
Among the BEE partners in Exxaro is BEE Holco, which holds a 52 percent stake. Mgojo said affordability of the deal was at the centre of the company’s doubts that the deal would be higher than 50 percent.
Exxaro did not want a highly geared BEE deal and would not install a BEE structure just to get over the 50 percent threshold. Mgojo seemed least worried about the impact of a less than 50 percent BEE ownership on coal contracts with Eskom, which wants its coal suppliers to have a more than 50 percent black shareholding.
Exxaro’s existing coal supply contracts would not be affected, but if the group wanted a new supply contract with Eskom, it would “top up” black ownership at the asset supplying the coal.
Exxaro was considering opportunities in the renewable energy industry in South Africa. The company had on its sights “distressed” renewable energy projects that have already been allocated capacity as part of the ongoing Renewable Energy Independent Power Producer Procurement programme, Mgojo said.
In need of cash
“It will depend on the opportunity and whether the opportunity makes sense to us. It is not the projects that are distressed but the shareholders who may be in need of cash,” Mgojo said. He declined to talk about the draft mining charter.
Meanwhile, Exxaro wants Eskom to provide capital funding for the Matla coal mine in Mpumalanga as stipulated in the coal supply agreement between the two entities.
“Large capital projects at Matla await approval from Eskom, with mine 1 on care-and-maintenance. We continue to engage Eskom to provide the required capital funding, which will improve performance. Alternatively, we will be considering available recourse,” Exxaro said.
Eskom spokesman, Khulu Phasiwe, yesterday confirmed that the companies were in discussions over the required capital funding.
Exxaro also announced that it was in discussions with Eskom over the costs associated with the closure of Arnot Mine in Mpumalanga, whose supply agreement with Eskom ended in December last year.
“We continue our discussions with Eskom to ensure full provision for the rehabilitation funds, mine closure costs and post mine closure costs in terms of the (National Environment Management Act) regulations as stipulated in the coal supply agreement,” the company said.
Exxaro shares on the JSE yesterday closed 0.43 percent down at R81.46 a share.
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