South African miner Exxaro announced that it has sold its 50% stake in the Rosh Pinah zinc and lead mine in Namibia to Commodities trader Glencore for an undisclosed amount.

Shareholders are advised that Exxaro, through its wholly owned subsidiary Exxaro Base Metals and Industrial Minerals Holdings Limited, has entered into an agreement relating to the disposal of its entire 50,04% shareholding in, and claims against, Rosh Pinah Zinc Corporation (Proprietary) Limited to wholly owned subsidiaries of Glencore International AG for an undisclosed cash consideration.

Glencore has also concluded an agreement with certain other shareholders of Rosh Pinah, namely PE Minerals (Namibia) (Proprietary) Limited and Jaguar Investments Four (Proprietary) Limited to acquire a further 30,04% shareholding in Rosh Pinah such that Glencore will hold an 80,08% shareholding in Rosh Pinah. PE Minerals, Jaguar and the Rosh Pinah Employee Empowerment Participation Scheme Trust will hold the remaining 19,92% shareholding.

The effective date of the transaction will be the last day of the month during which the suspensive conditions, set out, have been met.

Exxaro completed a Namibian empowerment transaction during 2008, where the Namibian shareholding in Rosh Pinah was increased to 49.96%. During 2009, Exxaro announced its intention to divest its zinc assets. This decision was based on a strategic assessment of the business portfolio which Exxaro undertook in 2009 after which it was decided to focus on its larger core assets in the coal and mineral sands industry.

Mr Sipho Nkosi CEO of Exxaro commented that “The conclusion of the transaction is part of Exxaro's strategic plan to divest from its zinc assets. The decision to dispose of our shareholding in Rosh Pinah and to cease production at Zincor, was made in the context of the difficult conditions of the zinc market, including its cyclical nature, low margins as well as the significant impact of the exchange rate and higher electricity prices.”

The Rosh Pinah zinc and lead mine is situated in south western Namibia, 800 kilometer south of Windhoek and operates an underground zinc/lead mine. The mineral deposit occurs in complex structural settings, favoring silling and benching mining methods. Rosh Pinah produced 101,000 tonnes of zinc concentrate and 19,000 tonnes of lead concentrate during 2010.