| Tue 28 Feb 2006, 8:01 | | ARM - ARM and Xstrata announce the formation of a |
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ARI
ARIM
ARM - ARM and Xstrata announce the formation of a major South African Coal
Mining Company
African Rainbow Minerals Limited
(Incorporated in the Republic of South Africa)
(Registration number 1933/004580/06)
JSE Share code: ARI LSE Share code: AGM
ISIN: ZAE000054045
("ARM" or the "Company")
ARM AND XSTRATA ANNOUNCE THE FORMATION OF A MAJOR SOUTH AFRICAN COAL MINING
COMPANY
Johannesburg, Tuesday 28 February 2006 - ARM and Xstrata plc ("Xstrata") today
announced that the companies have reached an agreement to establish a major
black controlled coal mining company ("ARM Coal"), in a transaction valued at
approximately R2.4 billion. ARM Coal will have significant operating assets and
growth projects in South Africa and a substantial participation in the thermal
coal domestic and export markets.
In terms of the agreement, ARM will pay R400 million and Xstrata will pay R384
million to subscribe for 51% and 49%, respectively, of the issued share capital
of ARM Coal. ARM Coal will hold a 20% equity based participation interest in the
existing coal operations of Xstrata South Africa (Proprietary) Limited ("XSA")
and a 51% interest in an unincorporated joint venture to be established, in
respect of the Goedgevonden project (collectively, "the transaction"). This will
provide ARM Coal with an effective interest in XSA"s coal business of
approximately 29%.
To enhance ARM"s participation in the South African coal industry, XSA has
agreed to grant ARM an option to acquire a direct equity based participation
interest in XSA"s coal business of 10%, which may result in HDSA control of 36%
of XSA"s coal business.
ARM and Xstrata intend to strengthen their partnership further through the
assessment and pursuit of opportunities in a range of other commodities in
Africa.
ARM Executive Chairman Patrice Motsepe said: "We are delighted that ARM Coal
will create a strategic partnership for ARM with one of the three largest coal
exporters in South Africa, providing significant exposure to a portfolio of
quality coal assets and a controlling stake in a major export project, the
Goedgevonden project. Our partnership with Xstrata is an exciting development
and establishes a basis for long-term co-operation to pursue opportunities in
other commodities in Africa."
Mick Davis, Xstrata Chief Executive commented: "The establishment of ARM Coal
will result in the creation of a significant, empowered coal company, enabling
direct HDSA participation in ownership and management representation in XSA"s
coal business. This continues the significant progress made by Xstrata Coal
towards transforming its business in all other facets of the Mining Charter.
Importantly, ARM Coal provides both Xstrata and ARM with a partnership through
which existing and future growth opportunities in South Africa can be pursued."
The transaction is subject to regulatory approvals and is expected to complete
in mid 2006. Following completion, Xstrata Coal Marketing AG will continue to
market all export coal produced by Xstrata"s existing operations and the
Goedgevonden joint venture.
ENDS
DETAILS OF ANALYST PRESENTATION
A presentation will be held at 10:30, today Tuesday 28 February 2006, to discuss
the transaction at the Sandton Convention Centre, Bill Gallagher Room (Maude
Street, Sandton). Members of the financial community are invited to attend the
presentation.
For all investor relations queries please contact:
Pieter Rorich
Executive: Corporate Development
Office: +27 11 779 1476
Mobile: +27 82 570 5064
pieter.rorich@arm.co.za
Issued by sponsor: Deutsche Securities (SA) (Proprietary) Limited
Johannesburg
28 February 2006
About ARM
ARM is a niche-diversified South African mining company of which 42.9% is owned
by African Rainbow Minerals & Exploration Investments (Proprietary) Limited.
Negotiations with numerous broad-based empowerment beneficiaries are being
finalised, which will result in 56.9% of ARM being controlled by HDSAs. ARM owns
ferrous metals, nickel and platinum operations and a significant interest in
gold through its holding in Harmony Gold Mining Company Ltd. Furthermore, ARM
holds an African exploration portfolio (copper, cobalt and gold) through a
company it controls and which is listed on the Toronto Stock Exchange, TEAL
Exploration and Mining Incorporated.
About Xstrata
Xstrata is a major global diversified mining group, listed on the London and
Swiss stock exchanges with approximately 26,000 employees and contractors world-
wide. Xstrata maintains a meaningful position in six major international
commodity markets: copper, coking coal, thermal coal, ferrochrome, vanadium and
zinc, with additional exposures to gold, lead and silver with operations and
projects across four continents and seven countries: Australia, South Africa,
Spain, Germany, Argentina, Peru and the UK. Xstrata Coal is one of the world"s
largest producers of export thermal coal and a significant producer of coking
coal. XSA"s coal operations contribute around one third of Xstrata"s total
annual coal production. In South Africa, XSA is the third largest exporter of
thermal coal and produces almost 20% of all thermal coal exported. Currently it
has interests in 13 mines, most of which are located within the two major
coalfields - Witbank and Ermelo, with consolidated annual production capacity of
in excess of 20 million tonnes of thermal coal, the majority of which is
exported.
Joint announcement by
African Rainbow Minerals Limited and /Xstrata Coal (South Africa)
Tuesday 28 February 2006
Sandton Convention Centre, Bill Gallagher Room - Level 2
ARM and Xstrata Coal (South Africa) will today host a discussion following the
announcement of the formation of a major South African coal mining company, and
will host a question and answer session after the briefing.
Date Tuesday 28 February 2006
Time 10:00 for 10:30
Venue Sandton Convention Centre
Bill Gallagher Room, Level 2
Webcast
A live webcast of the presentation will be available at www.arm.co.za at the
time of the briefing and the archive webcast will be available following the
briefing. Presentation material supporting the briefing will be available at
www.arm.co.za and at www.xstrata.com from 10:30 am.
Conference call
ARM Executive Chairman Patrice Motsepe, CEO Andre Wilkens and Xstrata Coal South
Africa COO Peter Freyberg will conduct a conference call for fund managers and
analysts on Tuesday 28 February.
For South Africa 16:00 pm (local time)
For North America 09:00 am (local time)
For Europe 14:00 pm (local time)
Dial-in numbers will be made available on our website.
For more information please contact:
African Rainbow Minerals
Corne Bobbert or Portia Sebulela
Phone: +27 11 779 1478 Phone: +27 11 779 1507
Mobile: +27(0)83 380 6614 Mobile: +27(0)82 887 9204
corne.bobbert@arm.co.za portia.sebulela@arm.co.za
Xstrata
Hillary Wilson or Claire Divver
Phone: +61 2 9253 6748 Phone: +44 20 7968 2871
Mobile: +61 4 Mobile: +44 7785 964 340
hwilson@xstratacoal.com cdivver@xstrata.com
Date: 28/02/2006 08:01:08 AM Produced by the JSE SENS Department
