South Africa Requires Community Stake for Exxaro-Total DealAntony Sguazzin and Paul Burkhardt
Exxaro Resources Ltd.’s deal to buy Total SA’s South African coal unit for $472 million must include a community stake to be granted state approval, the country’s mineral resources minister said.
Communities must benefit from such an acquisition as required by the law, Minister Ngoako Ramatlhodi said in an interview on June 4 in Cape Town. The companies have been told that it is essential for them to include such a stake, according to the minister. “I’ve said so.”
The price of coal at the Richard’s Bay terminal, South Africa’s main export hub for the fuel, has declined 25 percent since Exxaro announced the deal on July 28. The company in February said it was awaiting ministerial approval of the transaction in terms of section 11 of the nation’s mining law.
Nonkosi Dyan, a spokeswoman for Total’s South Africa unit, didn’t immediately return a call and e-mail seeking comment.
Exxaro declined to comment on when the deal could expire if approval isn’t granted, citing confidentiality regarding the transaction, Mzila Mthenjane, executive head of strategy for the company, said in an e-mailed reply to questions June 4. He declined to comment Tuesday regarding a community stake.
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