Total sold 100 percent of its stake in Total Coal South Africa (TCSA) to mining company Exxaro Resources for $472 million, the French company said Monday.
Exxaro is South Africa’s fourth largest coal producer and the largest supplier of coal to the South African utility company Eskom.
Exxaro controls seven coal mines in South Africa that produce about 40 million tons of annually.
TCSA operates three coal production complexes in the Witbank/Highveld Coalfields and has a majority interest in a significant prospecting project in the same area.
TCSA is also a shareholder of the Richards Bay Coal Terminal.
In 2013, TCSA sold 4.5 million tons of coal, exporting 95 percent of it to international markets.
TCSA is the fifth largest coal exporter in South Africa, primarily exporting to Asian markets.
Exxaro said the deal will bolster its exports.
“The acquisition increases the scale of Exxaro’s coal portfolio by about 12 percent,” Exxaro Chief Executive Sipho Nkosi said.
Total said the sale will allow company to focus on its core activities, including projects in South Africa.
“Total remains committed to South Africa, through its activities in marketing and refining, solar and deep offshore exploration,” President Gas & Power Total Philippe Sauquet said.
The deal will be financed with Exxaro’s existing corporate debt facilities, the company said.