EXX: Force Majeure and Renegotiation Notification From Transnet Freight Rail.
EXXARO RESOURCES LIMITED
Incorporated in the Republic of South Africa
(Registration Number: 2000/011076/06)
JSE share code: EXX
ADR code: EXXAY
Bond Code: EXX04
ISIN No: ZAG000160326
Bond Code: EXX05
ISIN No: ZAG000160334
(“Exxaro” or the “Company”)
FORCE MAJEURE AND RENEGOTIATION NOTIFICATION FROM TRANSNET FREIGHT RAIL
Exxaro shareholders are hereby advised that on 8 April 2022 Transnet SOC Limited (acting through
its Transnet Freight Rail Division) (“TFR”) served subsidiaries of Exxaro, being Exxaro Coal
(Proprietary) Limited and Exxaro Coal Mpumalanga (Proprietary) Limited, with letters stating that,
due to circumstances beyond TFR's reasonable control, it has been unable to perform a substantial
part of the services it contracted to perform. TFR believes that those circumstances will continue to
detract from its ability to perform for at least the next six months and that TFR was and remains
under force majeure.
Relying on certain force majeure provisions contained in the long term rail transportation
agreements (“Agreements”), TFR notified that those Agreements for the transportation of coal to
the Richards Bay Coal Terminal (“RBCT”) have terminated. Similar notices have also been issued
to other coal exporting parties with long term rail transportation agreements.
TFR has expressed the intention to finalise new 5-year agreements with affected parties by
30 June 2022. TFR indicated that during this period Exxaro's allocated capacity will remain in effect
until a new agreement is concluded and that it will continue to render transport services to Exxaro
in terms of its standard conditions of carriage.
After consultation with its legal advisers, Exxaro is of the view that the events relied upon by TFR
do not constitute force majeure events, that the Agreements did not terminate, and TFR's reliance
on any purported termination is invalid.
However, Exxaro and the other coal exporting parties are engaging with TFR and other
stakeholders to discuss this matter and to seek a mutually acceptable resolution. Both Exxaro and
TFR have expressed the intention to negotiate in good faith in order to address the issues of concern
to TFR. The potential impact on Exxaro cannot be determined until finalisation of the negotiations,
which may result in amendments to the Agreements.
Mzila Mthenjane, Executive head : Stakeholder Affairs
Tel: +27 12 307 7393
Mobile: +27 83 417 6375
Email : Mzila.email@example.com
14 April 2022
Lead Sponsor to Exxaro Resources Limited
Absa Corporate and Investment Bank, a division of Absa Bank Limited
Joint Equity Sponsor to Exxaro Resources Limited
Tamela Holdings Proprietary Limited
Date: 14-04-2022 02:01:00
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