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Exxaro says that zinc mining is not strategically aligned with its long-term goals. Image: iStock / Juan Jose Napuri
- Exxaro says that Industrial Development Corporation is no longer willing to take its 24.4% stake in Black Mountain Mining.
- The prevailing global and domestic economic conditions have led IDC to change its strategic priorities, according to a shareholder notice issued by Exxaro.
- Previously, Exxaro had concluded that zinc mining is no longer part of its long-term goals.
The Industrial Development Corporation (IDC) will no longer assume the 24.4% stake of mining group Exxaro in Black Mountain Mining.
Exxaro issued a notice to shareholders on Monday providing an update on the sale. The group has interests in the coal, mineral sands, iron ore and energy markets.
Exxaro had previously concluded that zinc mining was not “strategically aligned” with its long-term objectives, after reviewing its portfolio of assets. It then began a sale process for the sale of its stake in the Black Mountain Mining zinc mine to IDC. Vedanta Zinc has a 69.6% stake in Black Mountain Mining, which is located in the Northern Cape, while the mine employee stock ownership scheme has a 6% stake.
“Unfortunately, the sale will no longer proceed as planned due to a shift in IDC’s strategic priorities, given prevailing global and national economic conditions.”
“The conditions under which IDC originally considered the purchase of the shares have changed and reported a review of the transaction,” the notice to shareholders reads.
“In addition, given the changing dynamics in the local economic landscape, IDC is reprioritizing its capital allocation to ensure that it is geared toward actively supporting downstream opportunities to maximize potential job creation and retention opportunities,” Exxaro said .
The mining group said it would continue to “evaluate” its option regarding Black Mountain Mining, as part of its strategic review.
