BHP sells Koornfontein mine
Posted: 2 July 2007
BHP Billiton has reached closure on the sale of Koornfontein Mine (a mine within Coal's South African portfolio), together with 1.5Mtpa of Richards Bay Coal Terminal entitlement to an entity controlled by a black economic empowerment (BEE) consortium.
Economic benefit of the mine passed on 1 July 2006, being the Value Date, with deal closure being effective 1 July 2007.
The BEE consortium, which holds 50 per cent plus one share in the new entity, is led by Siyanda Resources (Pty) Limited and AKA Resources Holdings (Pty) Limited, and includes various broad based groups as well as a Koornfontein employee trust.Coronation Capital Limited and Investec Bank Limited will together hold 50 per cent less one share in the new entity.
The fulfilment of certain regulatory requirements including the conversion and transfer of Koornfontein's mining rights in terms of the Minerals and Petroleum Resources Development Act of 2002 and the approval of the South African Competition Commission has enabled the conclusion of the sale.
In addition to a cash consideration for the transaction, BHP Billiton will receive further compensation for potential future Eskom coal sales. The aggregate consideration in current money terms is approximately R430-million (US$60M). BHP Billiton has provided R70-million (US$10M) in vendor finance to the BEE consortium.
"The closure of this transaction means we can now transfer the new order mining rights to the buyers and complete a significant step in BHP Billiton SA's transformation strategy. We wish the new owners of Koornfontein the very best in their endeavours to add value and create a sustainable export and domestic coal business," said BHP Billiton SA chairman Vincent Maphai.
"This transaction forms an integral part of our Coal empowerment strategy in South Africa which involves the sale of operating entities to BEE controlled entities. This strategy commenced with the Eyesizwe assets, was followed up by the sale of Delmas, now Koornfontein and will culminate in the sale of Optimum in due course," said Dave Murray, president of BHP Billiton Coal.
Koornfontein Mine is an energy coal mine situated 200 kilometres east of Johannesburg in Mpumalanga province. It supplies energy coal to both the export and domestic energy coal markets.
The mine produced 3 million tonnes of saleable export quality steam coal in the twelve months to June 2006 and has a workforce of some 700 employees and 580 contractors.
To the date of the sale, Koornfontein Mine was 100 per cent owned by BHP Billiton Energy Coal South Africa.
Posted by Richard Price, Editor, EnergyME.com
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