Exxaro bids A$300m for African Iron: report

[miningmx.com] — EXXARO Resources has renewed its quest to directly own and operate iron ore assets, according to an unconfirmed report by Dow Jones which said the South African firm was preparing to bid A$300m (R2.4bn) for Sydney-listed African Iron.

Dow Jones, citing persons familiar with the proposed transaction, said the deal could be wrapped up as early as this week. Shares in African Iron, which owns the Mayoko iron ore project in the Republic of Congo, jumped more than 9% on Monday to 40 Australian cents in heavy trading volumes.

Asked by Miningmx to comment on the speculation, Trevor Arran, corporate affairs, said: “We wanted to be in iron ore and we said that we’ll continue look for opportunities. And it isn’t far away from us.

“But I really can’t comment on specific companies”. Shares in Exxaro Resources were 2.1% lower on the JSE today.

Exxaro Resources, which owns a fifth of Kumba Iron Ore, bid A$123m (R1bn) for Australia’s Territory Resources in May – an offer that was eventually repulsed after Territory’s cornerstone investor, the Singapore-based Noble Group, trumped its offer.

As with the bid for Territory, any potential bid for African Iron would require the support of one of two major shareholders: Cape Lambert Resources, which owns 25.2% of African Iron, or Equatorial Resources Ltd, the company’s second-largest shareholder with a 19.9% stake, said Dow Jones.

Unlike Territory Resources, which produces 1.6 million tonnes (Mt) and 1.8Mt of haematite iron ore annually, African Iron is still to build the Mayoko mine which is planned to have initial output of some 5Mtpa.

Calls to Exxaro Resources CEO, Sipho Nkosi, went unanswered at the time of writing. Additional comments from Exxaro management will be updated on Miningmx, however.