Exxaro begins construction at Inyanda

exxaro begins construction at inyanda

exxaro resources, sa’s fourth-largest coal producer and previously part of kumba resources, has started construction at its inyanda coal mine in the eastern part of the country.

exxaro planned to “capitalise on the buoyant global market for high-quality thermal coal,” said ernst venter, executive gm of exxaro’s coal unit, yesterday.

the mine, which would cost about r245m, would be producing 1-million tons a year of coal for export by next year, the company said.

south african coal producers, including anglo american, are expanding production to meet increased demand partly driven by the use of coal as an alternative energy source to oil.

sa might export 13% more coal, or as much as 78-million tons this year, its chief minerals economist, xavier prevost, said on january 5.

sa is the world’s third-largest thermal coal exporter after australia and indonesia.

exxaro said last week it had exercised its options to take up stakes in minerals sands business namakwa sands and zinc and lead company black mountain for an outlay of r2,2bn-r3,8bn.

the options were granted to exxaro resources at the time of the restructuring and empowerment of kumba resources and it said previously it intended to exercise them.

exxaro will pay r2bn in cash for namakwa sands, subject to adjustments for items such as capital spending, tax recoupments and working capital, which could bring the price to r3,35bn.

it will also pay r180m in cash for 26% of black mountain, subject to adjustments for working capital and exploration spending, up to a maximum of r450m.