Exxaro seeks exit from Vedanta zinc project Vedanta needs a company which is controlled by black South Africans to meet the conditions of its mining permit. South Africa’s Exxaro Resources Ltd. said it will exit a mining venture with Vedanta Resources Plc as the group founded by Indian billionaire Anil Agarwal plans to develop a $630 million zinc operation. Exxaro is bound by an agreement to remain a 26 percent shareholder in London-based Vedanta’s Gamsberg zinc project until at least 2016, Hilton Atkinson, a spokesman for the Johannesburg-based group, said yesterday in an e-mailed response to questions. It will seek to dispose of the stake later, he said. Vedanta will build the $630 million mine in South Africa’s Northern Cape province and a $152 million refinery for the steel-making ingredient in Namibia, the company said Nov. 13. It needs a venture partner like Exxaro, which is controlled by black South Africans, to meet the conditions of its mining permit, a requirement meant to narrow economic disparities created by apartheid rule. “Exxaro divested from its zinc portfolio over the past two years,” Atkinson said, referring to the sale of the Rosh Pinah mine in Namibia and the closing of its Zincor refinery in South Africa. “Our ultimate strategy is still to exit from zinc” completely. Exxaro will have to meet its financial obligations to the project until it decides to dispose of its stake, Kishore Kumar, chief executive officer of Vedanta’s zinc business, said in an interview near the site of the project. Kumar will be replaced by Deshnee Naidoo, who joined the company Nov. 10, Kumar said yesterday. “The long and short of it is they have an obligation,” Naidoo said, referring to Exxaro. “If they choose to exit at some point they still have to make right on the commitments.” Exxaro has not yet decided how it will fund the project, Atkinson said. Gamsberg is one of the world’s largest undeveloped zinc deposits, Kumar said. The price of zinc has climbed about 9 percent this year on the London Metal Exchange. ©2014 Bloomberg News
Posted on: Thu, 20 Nov 2014 03:36:06 +0000
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