RIO Tinto announced on Wednesday it has reached a binding agreement for the sale of its 74 per cent interest in Zululand Anthracite Colliery (ZAC) to Menar Holding.
The sum involved was not disclosed.
The remaining 26 per cent of ZAC will continue to be held by its Broad-Based Black Economic Empowerment partner, Maweni Mining Consortium Pty Ltd.
ZAC, an underground mine located near Ulundi, produces some 500 000tpa of premium quality anthracite for international and domestic customers and has over 1 300 employees and contractors.
According to a media release, the competitive sale process, run in close consultation with a number of stakeholders, ‘has been focused on ensuring the mine’s ongoing operation, required capital injection and future viability’.
It said Menar ‘has a proven track record of operating and investing in South Africa through its controlling interest in Canyon Coal, which owns three coal mines in Mpumalanga and other coal projects in Gauteng’.
Menar has committed to making a significant investment in the business to ensure the long term sustainability of the mine and associated employment.
Until the sale is completed, Rio Tinto will continue to focus on operating the mine safely and remains committed to a smooth transition.
The sale is subject to regulatory approval which is expected in the second half of 2016.
‘The sale of ZAC spells good news for the employees as well as the local host community,’ said RBM Managing Director, Mpho Mothoa.
‘Menar has a proven track record and are well placed to ensure a sustainable and prosperous future for the mine and its employees.’
