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South32 will not exit South Africa, COO says

Mike Fraser, COO of South32 Ltd.'s African operations, said the company has no plans to withdraw from the South African market, following speculation that the creation of South Africa Energy Coal as a stand-alone business might be part of an exit strategy.

"I can absolutely assure you, this is not the case," Fraser said at the Mining Indaba in Cape Town, South Africa.

In November 2017, South32 injected 4.3 billion South African rand, the company's biggest capital investment in recent history, in the Klipspruit extension project to extend the mine life by at least another 20 years. It will create about 4,000 jobs during the construction phase alone.

"We are committed to the long-term sustainability of our coal business," Fraser said. "Therefore, at the same time as announcing the Klipspruit investment, we also announced that we establish the Klipspruit investment in South Africa Energy Coal as a stand-alone business."

He said the move was aligned with the company's view that mining could be a significant vehicle for creating shared value and contributing to Africa's economic transformation.

"Consistent with our objective to further transform our South African operations, we will commence the process of [broadening] the ownership of South Africa Energy Coal," Fraser said. "Predictably, this has led to a lot of speculation that the separation process and the broadening of local ownership marks the beginning of an exit from this country. I can absolutely assure you, this is not the case."