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UPDATE 2-Glencore Interested in Buying Optimum Coal

Thursday, 01 Sep 2011 10:52 AM

* Glencore's biggest target since its listing

* Asian giants hungry for S.African coal (Adds comments by Glencore, share price)

JOHANNESBURG/LONDON, SEPT 1 - South Africa's Optimum Coal confirmed on Thursday a consortium including a unit of commodity trading giant Glencore and prominent local politician-turned tycoon Cyril Ramaphosa was interested in buying it for about $1 billion.

This would be Glencore's most significant purchase since its record share listing, when it sacrificed its fiercely protected privacy to gain the balance sheet firepower for making acquisitions.

Optimum, a mid-size producer has export capacity and reserves that make it attractive prey for big foreign companies hoping to capitalise on Indian and Chinese demand.

The acquisition of South Africa's sixth-largest coal producer would give Glencore access to two operating assets, the Optimum Collieries and Koornfontein Mines, as well as 8 million tons of coal export entitlements from the Richards Bay Coal Terminal.

"Optimum's high quality, long life coal assets and significant presence at Richards Bay Coal Terminal would be an attractive addition to our existing South African coal business," said Tor Peterson, director of the Coal/Coke commodity department at Glencore.

"We expect strong Chinese and Indian imports and concerns surrounding nuclear generation capacity to result in sustained underlying demand for coal," he added.

Glencore, via its wholly owned subsidiary Piruto B.V., said on Thursday that it and Lexshell 849 Investments Ltd, a company owned by Ramaphosa, have entered into agreements to buy 43.51 percent of Optimum's shares.

The consortium plan to buy the remaining shares for 34 rand each, a 26 percent premium on the coal producer's share price before it released a cautionary statement on Aug. 17.

Shares in Optimum were up 1.4 percent at 33.55 rand, while Glencore's shares were down 1.0 percent at 1405 GMT.

Glencore said the proposed transaction will preserve Optimum's status in South Africa as a black-owned, black controlled company. (Reporting by Ed Stoddard and Julie Crust; Editing by Jon Herskovitz and Greg Mahlich)

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* Glencore's biggest target since its listing * Asian giants hungry for S.African coal (Adds comments by Glencore, share price) JOHANNESBURG/LONDON, SEPT 1 - South Africa's Optimum Coal confirmed on Thursday a consortium including a unit of commodity trading giant...
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Thursday, 01 Sep 2011 10:52 AM
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