UPDATE 1-Exxaro may buy Anglo's South African iron ore, coal mines

Published 2016/03/03, 13:04
Updated 2016/03/03, 13:10
UPDATE 1-Exxaro may buy Anglo's South African iron ore, coal mines
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(Recasts with possible Kumba purchase, quotes, share prices)
By Zandi Shabalala
JOHANNESBURG, March 3 (Reuters) - South African coal miner
Exxaro Resources EXXJ.J is considering buying assets from
Anglo American AAL.L AGLJ.J , its chief executive said on
Thursday.
The diversified mining company mainly produces coal and
invests in iron ore, posted a two-thirds drop in full-year
profit dropped by due to a sharp fall in commodity prices, and
reported a sharply lower dividend.
Exxaro's CEO Mxolisi Mgojo told reporters and analysts he
would consider buying assets from Anglo, which has said it plans
to sell its iron ore, coal and nickel units in a sweeping
strategic overhaul to cope with a commodities rout.
"As part of looking at our own portfolio we will determine
whether it makes sense and if there is value," said Mgojo.
Financial director Wim De Klerk told Reuters the option to
buy Anglo's Kumba Iron Ore KIOJ.J unit was a possibility.
"We note their announcement last week and we are partners in
Sishen so we will be considering our options now that we know
they are on sale," he said.
Exxaro holds a minority stake in the company that runs
Sishen, one of the largest open pit mines in the world, while
Kumba holds 73 percent.
Headline earnings per share - the key measure of profit
which strips off certain one-off items - reached 457 cents from
1,372 cents in the previous year, meeting expectations forecast
by Thomson Reuters StarMine SmartEstimates.
The firm's shares rose 3 percent to 73.46 rand by 1000 GMT,
despite Exxaro saying it would pay a final dividend of 85 cents
per share, down 60 percent from the previous year.
The firm also cut spending on a five-year coal programme to
2020 by 15 percent to 18 billion rand ($1.16 billion).
The company cut spending by 807 million rand in the year to
December and said it expects to cut 2016 costs by 300 million
rand, with the lion's share of all capital expenditure focused
on improving its coal business.
($1 = 15.5630 rand)

(Editing by James Macharia)

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