Johannesburg - Exxaro Resources’ [JSE:EXX] deal to buy Total SA’s South African coal unit for $472m must include a community stake to be granted state approval, minister of mineral resources Ngoako Ramatlodi said.
Communities must benefit from such an acquisition as required by the law, Ramatlodi said in an interview on Thursday in Cape Town. The companies have been told that it is essential for them to include such a stake, according to the minister. “I’ve said so.”
The price of coal at the Richard’s Bay terminal, the country's main export hub for the fuel, has declined 25% since Exxaro announced the deal on July 28. The company in February said it was awaiting ministerial approval in terms of section 11 of the nation’s mining law.
Nonkosi Dyan, a spokesperson for Total’s South Africa unit, didn’t immediately return a call and e-mail seeking comment.
Exxaro declined to comment on when the deal could expire if approval is not granted, citing confidentiality in regards to the transaction, Mzila Mthenjane, executive head of strategy for the company, said in an e-mailed reply to questions June 4.
He didn’t respond to an e-mail on Tuesday about the community stake.