[miningmx.com] — Sasol Mining on Thursday concluded the Ixia Coal transaction, as part of the company’s empowerment strategy, with WIPCoal Investments as the majority partner.
In terms of the transaction, Ixia Coal Funding, a subsidiary of Ixia Coal, has acquired a 20% shareholding in Sasol Mining. Shareholder and funding agreements for the transaction were concluded in October 2007 and April 2009, respectively.
Sasol Mining Holdings has a 49% shareholding in Ixia Coal and has committed to establish Ixia Coal as a black women controlled operational mining company with operating capacity, operating assets and growth opportunities. WIPCoal Investments is the controlling shareholder of Ixia Coal with 51% shareholding.
The transaction value is R1.85bn and is financed through equity and a combination of third party and Sasol funding. The debt will be repaid from future dividends by Sasol Mining.
The shareholders of WIPCoal Investments are Wiphold and a new entrant created by Wiphold called Mining Women Investments. Mining Women Investments comprises approximately 5 000 rural and peri-urban black women who have not previously participated in BEE transactions. The women are drawn from the Free State, Mpumalanga and Limpopo provinces, where Sasol Mining has operations and coal reserves.
Mining Women Investments was formed following a series of Wiphold workshops with women in the three provinces. The participation of Mining Women Investments has been facilitated by Wiphold and Sasol Mining.
The transaction was concluded on September 29 2010, following the fulfillment of key suspensive conditions.
In March 2010, the department of mineral resources granted approval for the conversion of Sasol Mining’s old order mining rights in respect of the Secunda Complex, as well as those for the Sigma:Mooikraal Operation situated near Sasolburg in the Free State.
The transaction is structured in a manner that provides for dividend payments to the shareholders from day one, which means that the shareholders of WIPCoal Investments receive cash dividends from the first year of the investment.
The first dividend flow of 30 September 2010 includes approximately R22m to be distributed to WIPCoal. After repayment of approximately 40% of Mining Women Investments debt, a further R5m will be distributed by year end amongst the almost 5 000 rural and peri-urban black women members and designated projects of Mining Woman Investments.
The parties have also entered into a Memorandum of Understanding which outlines the plan to operationalise Ixia Coal. To achieve this objective, Sasol Mining and WIPCoal Investments are currently in process identifying a suitable mining asset to be acquired by Ixia Coal.
