Total has signed an agreement with Exxaro Resources Ltd for the sale of its 100% stake in Total Coal South Africa (TCSA), its coal-producing affiliate in South Africa. The consideration for the transaction is $472 million, with completion of the sale subject to approval by the relevant South African authorities.
“This sale is part of the Group’s 2012-14 asset sale program and is in line with Total’s objectives to focus on its core activities and to actively manage its portfolio”, said Philippe Sauquet, President Gas & Power, Total. “While Total has made the necessary investments to position TCSA for growth in the medium term, Total believes TCSA will have the opportunity to maximize its long term potential with a new strategic coal investor. Total remains committed to South Africa, through its activities in marketing and refining, solar and deep offshore exploration.”
TCSA operates three coal production complexes in the Witbank/Highveld Coalfields and has a majority interest in a significant prospecting project located in the same area. It is also a shareholder of the Richards Bay Coal Terminal to which these mines are connected through a railway line. In 2013, TCSA’s sales of high quality thermal coal were 4.5 million tons, of which 95% was exported to international markets, making TCSA the 5th largest coal exporter in South Africa.