Overlooked Colliery, a 100% black-owned coal mining company, has bought three non-core mines from Exxaro, regarded as one of South Africa’s largest black empowered mining companies.
Exxaro has said it is confident that, with its strong track record, Overlooked is better placed to grow ECC coal assets. “Exxaro’ s strategic view that the assets have value and that a different operator is better placed to extract maximum value from these assets.”
Currently, Overlooked produces 2.4 million tonnes of coal a year. With capacity from the new assets it plans to double to 4.8 tonnes per annum.
Overlooked has met the selection criteria, which include value maximisation, broad-based black ownership and sustainability of the new operator to operate the assets, while also minimising transaction execution risk for Exxaro, Exxaro said.
Overlooked had procured funder confirmation and guarantees from Absa and “another South African bank” towards the settlement of its obligations in terms of the ECC transaction, it added.
The transaction is subject to approval by the Competition Commission and the Department of Mineral Resources and Energy.
In a strategic review, Exxaro deemed Dorstfontein, Forzando and Tumelo operations — collectively known as Exxaro Coal Central (ECC) — as non-core to the company’s future strategic objective, which entails diversifying away from coal into greener alternative energy technologies.