In an unadjusted purchase price consideration of R11.67 billon, diversified resources company Exxaro Resources Limited has acquired a portfolio of manganese assets strategically located within the Kalahari Manganese Field in Northern Cape, indicating a milestone in the company’s strategic journey, anchored in its strong coal resources, of transitioning into a diversified minerals and energy-solutions business.
The company has entered into binding agreements to acquire shares and claims in manganese assets held by mining investment company Ntsimbintle Holdings and manganese ore and ferroalloy company OM Holdings.
The target assets consist of:
- 74% of Ntsimbintle Mining
- 19.99% of Jupiter Mines
- 100% of Ntsimbintle Marketing and Trading
- 51% of Mokala Manganese
- 9% of Hotazel Manganese Mines
The target assets to be acquired from OM Holdings comprise 26% of Ntsimbintle Mining, resulting in Exxaro acquiring 100% of Ntsimbintle Mining.
Through the acquisition Exxaro gains exposure into four operating mines, which includes 60,1% effective ownership in Tshipi Borwa Mine (including 50.1% marketing rights), 51% in Mokala and 9% in Hotazel Manganese Mines which operate Mamatwan and Wessels mines.
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The acquisition gives Exxaro commodity diversity and strength with long life assets, and upside brownfield expansion potential through a substantial mineral resource base, with long-term contracts and stable customer base predominantly in China and India, tying in well with its existing exposure to these export markets.
Speaking about the transaction, CEO of Exxaro Ben Magara says: “This transaction puts together two strong BEE companies who are both consistent dividend payers and positions Exxaro as a formidable and diversified mining company of reference in South Africa. I am delighted that we can utilise our strong coal resources as a base to prudently accelerate our asset portfolio to include transition minerals and to grow our energy solutions business.”
He adds that the acquisition provides Exxaro with a strong entry point into the manganese sector. “Manganese is essential to steelmaking and has a growing market in the battery and renewable technology supply chains. The acquisition will see us deploy our operational and commercial expertise in bulk commodities, logistics and deep knowledge of the South African mining landscape, including the regulatory environment, to unlock sustained growth and stakeholder value in the Kalahari Manganese Field.”