Exxaro Resources, which would like to buy all or part of Optimum Colliery’s export entitlement, declared a final dividend of R4 per share, marking a year of strong returns for shareholders.
Exxaro paid a R3 per share interim dividend and a special R12.55 per share dividend to disburse cash from the sale of part of its stake in Tronox, an American business dealing in titanium.
Exxaro, which has undergone a complex replacement of its empowerment structure, posted revenue of R22.8bn for the year, up from R20.9bn, with increased coal sales and prices contributing to the performance.
Net operating profit was R6bn, up from R5.2bn before. Attributable earnings were R5.98bn, up from R5.68bn the year before.
Exxaro slipped into net debt of R84m from a net cash position of R1.3bn.
The Optimum Colliery, which is owned by Tegeta Resources after the questionable support from state power utility Eskom, is in a business rescue process and several groups have indicated they are interested in the asset, along with other collieries in the Tegeta stable that are similarly in business rescue.
Exxaro CEO Mxolisi Mgojo and executive head of coal operations Nombasa Tsengwa said the company was not interested in the colliery but wanted all or part of Optimum’s coal export allocation from Richards Bay Coal Terminal, which was strategically important to Exxaro as one of SA’s largest coal miners.
Exxaro sells coal abroad, as well as to Eskom and to ArcelorMittal SA. Increasing its export allocation would give it access to higher-price markets abroad.
Tsengwa said Exxaro had not yet started talks with the business rescue practitioners, but Exxaro was not looking to duplicate the assets it already had in its portfolio. "We’d be interested in the entitlement because that’s something we’ve identified strategically where we’d like to grow," she said.
Mgojo said the export entitlement and the colliery could be separated in a sales process, and Exxaro would be interested in all or part of the entitlement. Optimum has about 6-million tonnes of Richards Bay Coal Terminal's 81-million tonne capacity.
"You can just ask for a portion of the entitlement or all of it without taking all the assets. It depends on what other players are offering for the combined packages … the entitlement is most strategic for us than the rest of the assets," Mgojo said.