Glencore is the new owner of Rosh Pinah zinc mine after a successful acquisition of Exxaro Base Metals's entire shares in the mine.
The deal give Glencore a stake of 80,08 percent of the Rosh Pinah mine and reduced the Black Economic Empowerment (BEE) shares in the mine to 19,92 percent from 49,96 percent. Switzerland-based Glencore announced the finalisation of the deal on Monday.
The company did not disclose the total transaction value, but experts estimate it at N$931 million although the exact final figure is subject to last adjustments for net debt and working capital changes.
The sale is effective from the first day of this month [June]. The Namibian mine deal finds Glencore in a bit of a tussle with the authorities over its energy trading and supply side of the business.
Last year, Glencore successfully sued the Namibian government and state-owned National Petroleum Corporation of Namibia (Namcor) over government's termination of the contract to supply 50 percent of Namibia's fuel needs to Namcor.
However, the company says it sees "a lot of opportunity in Namibia" and entering the Namibian zinc-mining sector "would add further value to Glencore, as part of our geographically diverse zinc operations," said Daniel Maté, the company's director.
Glencore started courting Exxaro Resources for Rosh Pinah zinc mine in December last year. In the end, not only did Glencore buy up all of Exxaro's 50,04 percent shares in the mine, but it also bought an additional 30 percent of the 49,96 percent held by PE Minerals and Jaguar Investments.
"[We] look forward to proceeding with the future development of Rosh Pinah," said Maté. Rosh Pinah's underground zinc/lead mine is situated 800 kilometres south of Windhoek.
The mine produced 89,000 tonnes of zinc concentrate and 16,000 tonnes of lead concentrate in 2011.
Exxaro chief executive officer Sipho Nkosi said divesting from Rosh Pinah "forms part of our strategic plan to divest from our zinc assets, a decision made in the context of the difficult conditions of the zinc market, including its cyclical nature, low margins, the significant impact of the exchange rates and higher electricity costs."
Intensive on-mine exploration is underway to add to the total mineral resource of 8 million tonnes. Exxaro had estimated the current economic mine life at eight-and-a-half years based on annual zinc concentrate production of 95,000 tonnes.