LONDON (Reuters) - Commodities trading giant Glencore (GLEN.L) and South African partner Cyril Ramaphosa are interested in buying miner Optimum Coal Holdings (OPTJ.J) and are preparing a formal announcement, sources close to the deal said on Thursday.
Shareholders in South Africa's sixth-largest coal producer confirmed they had received an offer from the commodities giant and partner Ramaphosa, whose unlisted Shanduka Resources owns 30 percent of Shanduka Coal, a venture with Glencore.
OCH last week issued a cautionary statement, alerting investors to circumstances which could affect its share price, but has denied having been approached by any prospective buyer.
OCH, formerly owned by mining giant BHP Billiton (BLT.L), will produce 13.7 million tonnes of coal in 2011, up from 13.6 million in 2010.
"Glencore is committed to long-term investment in South Africa," one of the sources close to the deal said.
"Glencore and its partner fully recognise that Optimum has a broad-based Black Economic Empowerment ownership and is a benchmark for transformation and would not seek to prejudice Optimum's BEE credentials," the source added.
Glencore, which has $10.4 billion of cash it could spend, is considering acquisitions more aggressively because the current market turmoil has caused the price of listed assets to drop while private companies were less optimistic about their outlook.
"Is this the bottom? I don't know, but it is definitely a better time to look at acquisitions," Glencore Chief Executive Officer Ivan Glasenberg told reporters earlier on Thursday when the company's second quarter results were announced.
Shanduka Coal, 70 percent owned by Glencore, has until recently been Glencore's vehicle for investment in coal mining in South Africa.
Shanduka Coal owns 100 percent of the Graspan, Townlands, Bankfontein, Leeuwfontein and Lakeside coal mines, which were acquired between 2006-2007.
According to Glencore's website, their total run of mine production capacity is around 9 million tonnes a year.
"We have been made an offer but we haven't decided yet, our board meets on Saturday to decide one way or another," said Mandla Tshabalala of Mobu Resources Pty Limited, a minority shareholder in OCH.
"We don't want to just cash out and retire to the Bahamas, we have expertise in mining and it's not our government'a policy for junior miners to be purely silent cash investors, we want to be involved in any new entity," he added.
Asked to comment on Glencore's move to buy OCH by buying from the various entities who own stakes in it, a senior mining industry source with connections to OCH said: "the structure may not turn out to be quite as you describe it."
Earlier on Thursday OCH Chief Executive Officer Mike Teke said, when asked if he saw OCH as a target for consolidation: "We are acquisitive about being a target, I'm not sure. We see ourselves as an operating asset, as being acquisitive and looking at others as targets." [
Asked if OCH had been approached by anybody, Teke said "no."
Later in the day, asked about a Glencore bid, Teke declined to comment when asked if OCH had been approached.
"Last week we issued a cautionary and I prefer not to comment," he told Reuters.
Optimum was avidly pursued by several majority black-owned junior miners when BHP put it up for sale and some of these players remain determined to derail Glencore's bid for what was one of BHP's most prized assets.
Aside from producing export grade coal, Optimum is the key supplier of fuel to state power utility Eskom's Hendrina power plant, which is next door to the mine.
(sourced Reuters)
Posts
No comments:
Post a Comment