Exxaro to list Tronox in New York

Dineo Faku

EXXARO Resources would list class A shares of Tronox Limited on the New York Stock Exchange next Monday, under the ticker symbol Trox, the South African diversified mining company announced yesterday.

Tronox is a new Australian holding company which was formed as part of Tronox Incorporated’s plans to combine the acquired business with its existing assets.

Exxaro said approvals by Tronox Incorporated shareholders and regulators, which were needed to close the transaction, had been met. The proposed transaction entailed Tronox acquiring Exxaro’s mineral sands operations in exchange for a 38.5 percent shareholding in Tronox.

The mineral sands operations include Exxaro’s 50 percent interest in joint venture Twist with Tronox in Western Australia, along with its 74 percent stake in KZN Sands and 74 percent holding in Namakwa Sands operations in South Africa.

Stephen Meintjes, a mining analyst at Imara SP Reid, said the listing would unlock value.

“Exxaro will gain recognition for its strategy to become a mining company that has diversified successfully,” he said.

Tronox is a global leader in the production and marketing of titanium products.

The proposed transaction, which was first announced in September last year, will be completed on Friday.

Tronox said after the closing of the transaction, its management would recommend to the board that a special dividend of $25 (R208) a share be declared and a regular quarterly dividend be adopted in the fourth quarter of this year.

In another deal, Exxaro advised shareholders yesterday that it had completed the disposal of its 50.04 percent shareholding in Namibian zinc mine Rosh Pinah to Glencore International for a consideration of R931 million.

This figure was subject to final adjustment for net debt and working capital changes effective from June 1.

The sale had been on the cards for some time and followed Exxaro’s decision to divest its zinc assets and to focus on larger core assets in the coal and mineral sands sectors.

Exxaro chief executive Sipho Nkosi said: “The divestment of Exxaro’s interest in Rosh Pinah forms part of our strategic plan to divest from our zinc assets, a decision made in the context of the difficult conditions of the zinc market, including its cyclical nature, low margins, the significant impact of the exchange rate and higher electricity costs.

“The completion of the transaction to a large extent concludes our divestment plan,” Nkosi added.

Exxaro is involved in a joint venture with Tata Power, Cennergi, which plans to build a hydroelectric plant in the Republic of Congo.

Meintjes said it was a good time for the acquisition of mining companies because shares were depressed.

He said Nkosi had done a good job by retaining a competent management team.

Exxaro shares closed 0.1 percent lower at R199.25.