Exxaro buys Territory Resources in bid to enter iron ore market

SOUTH African diversified miner Exxaro bid $130m (£80.7m) in cash for Australia’s Territory Resources, making a pricey wager to expand into iron ore mining.

Exxaro, one of South Africa’s largest coal miners, said yesterday it had offered A$0.46 per Territory share, representing a 64 per cent premium to the last closing price. The deal values Territory at A$123m, Exxaro said.

Analysts said the price was expensive given the short three to five-year life span of Territory’s mine.

Territory produces approximately 1.6m tonnes of lump and fine direct shipping ore. It also owns rights to iron ore tenements and has access to China via the port of Darwin, Exxaro said.