Diversified South African-based resources company Exxaro Resources, the Rosh Pinah Zinc Corp and the Namibian empowerment company PE Minerals today announced that Exxaro has divested a 43.8% interest in Rosh Pinah to Namibian shareholder groupings. This effectively reduces Exxaro’s shareholding in Rosh Pinah to 50.04%, with 49.96% held by Namibian shareholders. Exxaro will continue to manage the Rosh Pinah mine in southwest Namibia in terms of a management agreement. Together with Exxaro’s Zincor refinery in Gauteng which it supplies with zinc concentrate, Rosh Pinah mine is part of one of few integrated zinc mining and refinery operations in the world. In the 2007 financial year Rosh Pinah and Zincor produced 95,000 t of zinc concentrate and 101,000 t of zinc metal respectively.
The Namibianisation transaction follows an agreement between Rosh Pinah, shareholder PE Minerals, the Namibian government and Exxaro’s predecessor, Iscor , in terms of which the parties agreed to sell a 50% interest in Rosh Pinah to Namibian citizens. Prior to today’s transaction, the shareholding of Exxaro in Rosh Pinah was 93.9%, with PE Minerals holding 6.1%.
Speaking at the announcement in Windhoek today, Exxaro’s CEO, Sipho Nkosi, said: “Since our listing in 2007 we have fully supported the obligations Exxaro assumed from its predecessors Iscor and, in turn, Kumba Resources. However, it was only when buoyant zinc commodity prices improved substantially from mid-2006 that the parties were able to develop a bankable financial structure to support the transaction, bringing us to today’s reality.”
Chairman of Rosh Pinah Zinc Corp and Exxaro’s CFO, Dirk van Staden, added: “This announcement marks the culmination of many months of work overseen by the Rosh Pinah board, banks, legal experts and the respective teams from Exxaro and PE Minerals. The deal involves a major employer in and contributor to the Namibian economy and adds significant value to a range of stakeholders including the people of the country.”
Chairman of PE Minerals, Aaron Mushimba, said: “This private sector initiative between Exxaro, PE Minerals and Rosh Pinah shows a unified commitment to social responsibility and empowerment of Namibians during tough economic times. Although commodity prices have improved significantly and mines are performing better, the financiers of this transaction would not have felt comfortable to finance it without the political stability created by the Namibian government. The shareholder base has been widened significantly among Namibians, including the workforce at Rosh Pinah.”
Together with Exxaro, the transaction was facilitated by PE Minerals, the holder of the mineral rights for Rosh Pinah, which was tasked to evaluate and consider appropriate beneficiaries of the transaction, obtain Namibian government approval of new shareholders, and negotiate and structure the transaction on behalf of Namibian shareholders.
The new Namibian shareholders are represented by the company, Jaguar, consisting of a broad-based range of shareholders. Beneficiaries through Jaguar range from traditional authorities, communities and individuals including employees.
The shareholders have agreed to form an employee empowerment participation scheme in terms of which qualifying employees at Rosh Pinah will be entitled to 3% of the future dividends declared by Rosh Pinah. In terms of the agreement Exxaro, PE Minerals and Jaguar will each donate a proportionate number of shares to form a trust through which the employee empowerment participation scheme will be administered.
Once the shares have been taken up by the trust the final shareholding in Rosh Pinah will be:
- Exxaro 50.04%
- PE Minerals Namibia 8.00%
- Jaguar 38.99%
- Employee Empowerment Participation Scheme 2.97%