The deal would be funded from Exxaro's existing corporate debt facilities, it said. Exxaro's shares gained 1.4% to R143.19 immediately after the announcement.
Total Coal confirmed in February that it was selling its coal mines, which include the Dorstfontein and Forzando complexes, but said it did not represent a divestment from the country. It was rather the divestment of a noncore asset. Its retail businesses were not affected and it was continuing to invest in oil and gas exploration in South Africa.
Exxaro said the deal would give it large-scale operating assets, with a remaining life of about 20 years. The deal would also increase the scale of Exxaro's existing operations and give it an additional entitlement to export up to 4.09-million tonnes of coal a year through the Richards Bay Coal Terminal (RBCT). This would enable it to optimise its existing operations and develop multiproduct mines in the Waterberg.
The deal requires the approval of the competition authorities, the minister of mineral resources, the South African Reserve Bank and the board of directors of RBCT.