[miningmx.com] — FORBES & Manhattan Coal is buying global diversified
miner Rio Tinto’s majority stake (74%) in Zululand Anthracite Colliery (ZAC) for an
estimated R440m, the TSX and JSE-listed company said on Monday.
Also included in the transaction was Rio Tinto’s 74% stake in Riversdale Anthracite
Colliery, an undeveloped anthracite resource. The balance of the shareholding in the
two assets are held by black economic empowerment partners.
Forbes Coal would have to fork out R315m on closing of the transaction. A variable
payment, estimated to be R62.5m, would be due on June 30 2013 based on saleable
production levels the previous year. A similar variable payment would be due a year
later.
In addition, Forbes Coal would also pay an annual revenue share of 10% on
incremental revenue above R850m, adjusted for CPI, until 2025.
The company said that ZAC was one of the last, large-scale high-quality anthracite
producers in South Africa, featuring an historic average run of mine production of
700,000 tonnes of coal per year over the last five years. The mine has an historic
Ebitda of $10m to $15m per year over the last four years.
The asset also features a rail siding 10km from the plant, as well as a 150,000 tonnes
per year Quattro allocation at Richard’s Bay Coal Terminal. The financing of the
acquisition would come from a R396m debt facility, underwritten by Investec Bank, as
well as cash on hand.
