[miningmx.com] — EXXARO Resources increased net profits 35% to R3.2bn in the six months to end-June (previous comparable six months – R2.4bn) on the back of a 24% rise in revenues to R9.3bn (R7.5bn).
The interim dividend has been increased 50% to 300c a share from the previous interim payout of 200c.
The main drivers were higher earnings from the export coal and mineral sands business with coal revenue 22% up at R5.8bn and mineral sands revenues 36% up at R2.9bn.
The coal division reported net operating profits 36% up at R1.6bn while mineral sands reported a net operating profit of R652m.
Exxaro also received a 56% jump in income from its investment in the Sishen Iron Ore Company (SIOC – an operating subsidiary of Kumba Iron Ore) which rose to R2.5bn (R1.6bn) because of booming conditions on the iron ore export market.
The base metals division made a net operating loss of R125m because of the problems at the Zincor refinery near Springs against which an impairment charge of R439m was provided bring the consolidated net operating loss for the division to R564m.
Exxaro is in the process of selling its zinc division but CEO Sipho Nkosi pointed out that, while a number of offers had been received for the Rosh Pinah zinc mine, no offers had been received for the Zincor operation.
Turning to the group’s projects in the Waterberg region, Nkosi said the facilitation for development of a 600MW coal-fired power station to be supplied by Exxaro’s proposed Thabametsi mine was underway.
Nkosi commented: “Non-binding term sheets for the off-take of 1,150MW of electricity have been signed between Exxaro and industrial off-takers.
“While the pre-feasibility has progressed, a formal request for proposal for a 600MW coal-fired, base-load power station was issued to IPPs (independent power producers) on June 14.
“Evaulation and selection to short-list the IPPs has commenced in order to select the preferred IPP by the end of 2011.’
