061314 Exxaro Chief Executive Sipho Nkosi briefing the media after the company annual results in Hydepark.photo by Simphiwe Mbokazi 453

Exxaro Resources would not allocate more funds for its iron ore project in the Republic of Congo until it had finalised agreements on the usage of rail and port facilities when production started, the JSE-listed mining group said yesterday.

Exxaro, which acquired the Mayoko project in 2012 as part of a takeover of Africa Iron, has already spent R2 billion on the project, part of a trend of South African mining companies investing elsewhere on the continent.

The company has so far secured a mining licence and signed memorandums of understanding with the Congolese rail and port authorities. But there are no agreements yet on how the ore can be transported on the railway and how it will be handled at the port.

“No further funds have been allocated to this project until we receive all the definite agreements,” finance director Wim de Klerk said during a presentation of Exxaro’s annual results yesterday.

“Our board will then have the opportunity to evaluate the final agreements, the impact on the project and what it will do to our balance sheet going forward.”

Exxaro is South Africa’s second-largest coal producer with interests in iron ore and base metals. It has several expansion projects in the works and has been looking for more growth opportunities, including the local coal assets of French oil company Total, which are up for sale.

“If Total is an opportunity, we will look at that and many other projects that are there,” chief executive Sipho Nkosi said. He said the company was also looking for opportunities in Mozambique.

Exxaro reported a slight rise in full-year earnings, helped by a strong performance in its coal business.

Headline earnings for the 12 months to December last year came in 4 percent higher at R14.63 as revenue leapt 11 percent to R13.6bn. It declared a final dividend of R3.15 a share, bringing the total dividend to R5.50, a rise of 10 percent.

The share price gained 2.76 percent to close at R149.50 on the JSE yesterday.