Exxaro writes down $543m on Congo project

JOHANNESBURG (Reuters) – South African mining group Exxaro has taken a 5.8 billion rand ($543 million) write-down on its Mayoko iron ore project in the Republic of Congo after failing to reach port and rail agreements, the company said on Wednesday.

Exxaro acquired the Mayoko project in 2012 as part of a takeover of Africa Iron as it sought to expand investment outside of South Africa but the project has failed to take off.

Exxaro's share price on Wednesday 30 July
Exxaro’s share price on Wednesday 30 July

The impairment amount included acquisition and projected related costs, the company said.

Exxaro is South Africa’s second-largest coal producer with interests in iron ore and base metals and has been looking for growth opportunities to bolster its output.

On Monday, the company said it had acquired the South African coal assets of France’s Total.

Exxaro will report on its first six months performance on Aug. 21. It expects basic headline earnings per share, which will exclude the impact of the impairment, to increase by between 5 and 12 percent from the 712 cents a year earlier.

($1 = 10.6725 South African Rand)