| Fri 29 Jul 2011, 10:30 | | EXX - Exxaro Resources Limited - Exxaro plans to cease production of Zinc |
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EXX
EXX
EXX - Exxaro Resources Limited - Exxaro plans to cease production of Zinc,
Contemplates Base Metals Retrenchments
EXXARO RESOURCES LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 2000/011076/06
JSE share code: EXX
ISIN: ZAE000084992
ADR code: EXXAY
(Exxaro)
EXXARO PLANS TO CEASE PRODUCTION OF ZINC, CONTEMPLATES BASE METALS RETRENCHMENTS
Diversified South African-based resources group Exxaro announced today that the
board of directors of Exxaro as well as the board of directors of Exxaro Base
Metals (Pty) Ltd have taken an in-principle decision to permanently cease
production of zinc at the Zincor refinery in Springs, Gauteng.
As a result, the retrenchment of employees at the operation is contemplated, in
the event that no feasible alternative can be found or there not being
sufficient suitable vacant positions available for the redeployment of employees
to the rest of the Exxaro Group.
As previously communicated to stakeholders since 2009, Exxaro has, as part of
its strategic plan, been considering options to optimise its zinc assets with a
view to ultimately divest from them. The decision was made in context of the
difficult conditions of the zinc market, including its cyclical nature, low
margins as well as the significant impact of higher electricity prices and the
exchange rate.
Exxaro`s current portfolio of zinc assets includes the Zincor refinery, a 50,04%
interest in the Rosh Pinah zinc and lead mine, a 26% interest in Black Mountain
(Pty) Ltd, which owns the Black Mountain zinc and lead mine and the Gamsberg
zinc project, as well as an effective 22% interest in the Chifeng zinc smelter
in China.
"We have been investigating a range of options to find a suitable buyer for our
zinc portfolio businesses. We have ideally wanted to sell all the zinc assets to
a single buyer, however, to date we have been unsuccessful in attracting
investor interest in Zincor," said Sipho Nkosi, Exxaro`s chief executive
officer.
"Issues that have influenced the decision of the board of directors of Exxaro to
take an in-principle decision to permanently cease zinc production at Zincor
include the fact that Zincor as a zinc-making operation has proved to be un-
saleable to potential investors; continued zinc-making is financially
unsustainable with Zincor incurring mounting financial losses; and turn-around
and improvement interventions have proved fruitless and are unlikely to get
Zincor on to a sustainable financial performance level," added Nkosi.
Exxaro has today informed its labour unions of the decision and will start a
consultation process in accordance with labour legislation and under the
auspices of the CCMA.
"We are taking all feasible steps to provide the most suitable options to
employees and other stakeholders," said Nkosi.
The sale of Exxaro`s shareholding in Rosh Pinah and Chifeng is ongoing and
Exxaro is in discussions with interested parties. Stakeholders will be kept
updated at the appropriate time.
Ends
For more information, investor and media stakeholders are invited to take part
in an Exxaro teleconference taking place today (29 July 2011) from 12h00 - 13h00
SA time.
To access the teleconference, dial one of the following numbers:
South Africa - Johannesburg: 011 535 3600 / 011 581 2002
South Africa - Cape Town: 021 819 0900
South Africa (Toll-Free): 0 800 200 648
Australia (Toll-Free): 1 800 350 100
UK (Toll-Free): 0 800 917 7042
USA 1 866 752 6302 (callers to press *0 for Operator)
Other Countries (Intl Toll): +27 11 535 3600
A playback will be available for 72 hours. Dial one of the following numbers
using Code 18301#
South Africa (Telkom): 011 305 2030
UK (Toll-Free): 0 808 234 6771
USA: +1 412 317 0088
Other Countries (Intl Toll): +27 11 305 2030
Editor`s Note:
Exxaro is one of the largest South African-based diversified resources groups,
with interests in the coal, mineral sands, base metals, industrial minerals and
iron ore commodities. www.exxaro.com
Enquiries:
Wim de Klerk
Finance director
Tel: + 27 12 307 4848
Mobile: +27 82 652 5145
Email: wim.deklerk@exxaro.com
Pretoria
29 July 2011
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 29/07/2011 10:30:01 Produced by the JSE SENS Department.
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