Exxaro announces African Iron takeover bid

Finance

Publishing Date: 11 Jan 2012 11:29am GMT
Author: Mining Journal

Exxaro Resources Ltd, which failed in its bid to secure an iron-ore junior last year, has announced a A$338 million offer for African Iron Ltd.

In this bid Exxaro has received support from African Iron’s board of directors and its largest shareholder, Cape Lambert Resources Ltd.

African Iron owns 92% of the Mayoko exploration project in the Republic of Congo. A production target of 5Mt/y of direct-shipping ore has previously been reported by management.

In July 2011, Exxaro, which also owns 20% of the Sishen iron-ore mine in South Africa, dropped its A$0.46/share bid for Territory Resources, after existing shareholder, Noble Group announced a A$0.50/share bid.

Sipho Nkosi, Exxaro’s chief executive said: “The African Iron acquisition will enable Exxaro to leverage its bulk commodity and iron-ore expertise into the development of the Mayoko project.

We have invested a significant amount of time and resources in due diligence on this acquisition including several site visits and meetings with senior members of the Republic of Congo government.”

Exxaro owns a number of coal mines in South Africa, it also has mineral sands projects in South Africa and Australia.