(Updates with closing share price in fourth paragraph.)
July 29 (Bloomberg) -- Exxaro Resources Ltd., the second- biggest South African coal producer, will take an impairment charge of about 500 million rand ($74.5 million) on the closure of its unprofitable Zincor plant after failing to find a buyer.
The charge will be booked in Exxaro’s interim results, Finance Director Wim de Klerk said today on a conference call. The company plans to shut the zinc refinery in Springs, South Africa, by Dec. 31 and may fire as many as 800 workers.
Exxaro, based in Pretoria, unveiled plans to restructure and sell zinc assets in 2009 because they had lower profit margins than other units and cyclical operations that were susceptible to rising energy costs and currency fluctuations. The company is scheduled to report interim results on Aug. 18.
Exxaro traded little changed at 180 rand in Johannesburg at the 5 p.m. close.
The company is in the second phase of due diligence to sell its Rosh Pinah zinc mine in Namibia, De Klerk said. It’s also selling a 22 percent stake in the Chifeng zinc smelter in China, and is at a “very advanced stage” of that process, he said.
Other holdings include a 26 percent stake in Black Mountain (Pty) Ltd., a zinc and lead miner that’s majority-owned by Vedanta Resources Plc. Any sale of that holding would be subject to South Africa’s black economic empowerment regulations, which “complicates” a potential transaction, De Klerk said.
South African legislation requires 26 percent non-white ownership of mining assets by 2014.
--Editors: Amanda Jordan, Tony Barrett
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