Geneva - Commodities trader Vitol has agreed to buy a 35% stake in a subsidiary of shipping firm Grindrod [JSE:GND]
, giving it access to a Mozambique coal terminal and enlarging its coal trading operations, Vitol said on Wednesday.
The Geneva-based company will pay $67.7m for loan claims and shares in Grindrod Mauritius, which owns the 6 million tonne Maputo coal and magnetite terminal.
Vitol and Grindrod will also combine their coal trading books to create a separate trading company of which Vitol will own 65% and Grindrod 35%, the firm said.
“Both parts of this transaction create opportunities to underpin a significant expansion of our coal trading business, which is an increasingly important part of Vitol’s global trading activity,” said Bob Finch, Vitol’s head of coal trading.
The deal is conditional upon approval from the Mozambique government.
Companies in the coal sector have begun to look beyond South Africa, dominated by the giant 72 million tonne a year Richards Bay Coal Terminal, to explore export routes in Mozambique and Namibia.
Vitol’s acquisition follows a similar move from its competitor Glencore, which in December acquired a 43.66% stake in an unlisted South African coal mining business for $111.63m.
Analysts have said that Durban-based Grindrod has sought to fast track plans to expand its Maputo coal terminal to help offset declining profit at its core shipping business, which has been hit by the global slowdown and weak freight rates.
In September it sold $250m of new shares to investment firm Remgro [JSE:REM]
to help fund its ambitious expansion.