South African diversified miner Exxaro Resources, Rosh Pinah Zinc and empowerment company PE Minerals this week announced that Exxaro has divested a 43.8% interest in Rosh Pinah to Namibian shareholder groupings. This effectively reduced Exxaro’s shareholding in Rosh Pinah to 50.04%, with 49.96% now held by Namibian shareholders.

Exxaro will continue to manage the Rosh Pinah mine in southwestern Namibia in terms of a management agreement. Together with Exxaro’s Zincor refinery in Gauteng, which it supplies with zinc concentrate, Rosh Pinah 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 kilo tons of zinc concentrate and 101 kilo tons of zinc metal, respectively.
The Namibianisation transaction follows an agreement between Rosh Pinah, shareholder PE Minerals, the government and Exxaro’s predecessor, Iscor Limited, in terms of which the parties agreed to sell a 50% interest in Rosh Pinah to Namibian citizens. Prior to this week’s transaction, the shareholding of Exxaro in Rosh Pinah was 93,9%, with PE Minerals holding 6.1%.
“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,” said Exxaro’s CEO, Sipho Nkosi.
Chairman of Rosh Pinah Zinc Limited and Exxaro’s chief financial officer, 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.
To facilitate the transaction, Rosh Pinah will declare a dividend of N$435 million to its existing shareholders (Exxaro N$408 million and PE Minerals N$27 million) from its cash resources. Shareholder loans of N$80 million (Exxaro N$75 million and PE Minerals N$5 million) will also be made to Rosh Pinah.
Rosh Pinah has procured committed working capital facilities with no recourse to its shareholders to the value of N$300 million from ABSA Bank Ltd and Standard Bank of Namibia Ltd. To accommodate the capital structure 60% of Rosh Pinah’s zinc and lead price exposure for 42 months will be hedged. A total of 47% has been hedged to date.