Commodities giant Glencore has signed a deal to buy energy trader Mercuria's 15 percent stake in South Africa's Optimum Coal Holdings (OCH) in its drive to acquire the whole company worth around $1 billion, sources close to the agreement said.
Before the deal Glencore said on October 17 it had bought 28.46 percent of OCH ordinary shares. It also has options to fully buy out several shareholders. All of these deals are subject to approval from competition authorities.
Completing the Optimum acquisition would make Glencore South Africa's fourth-largest coal exporter, without including Xstrata's tonnage, for which it provides advisory services. .
Glencore, aiming to be a major force in all top coal exporting regions, has been trying to gain control of OCH since June with its local partner, local politician-turned businessman Cyril Ramaphosa.
It started in June to buy shares from various owners of OCH, a substantial exporter with large reserves and highly-sought after export capacity at Richards Bay Coal Terminal.
Glencore declined to comment on the deal with Mercuria. A Mercuria spokesman was not immediately available for comment.
The sources, who declined to be named, said the agreement in principle includes Mercuria's marketing agreement for coal from the Koornfontein mine and future output from the Optimum mine.
The competition commission, which will rule on all of Glencore's OCH acquisitions together, is likely to take several months to reach a decision, the sources said.
The overall price for the sale of Mercuria's shares and marketing rights was not disclosed, but Mercuria is to be paid in U.S. dollars while other shareholders who have sold to Glencore have and will be paid in South African rand, the sources said.
Glencore will begin marketing OCH's coal in June next year, the sources said.
Glencore will shortly make a formal offer to all remaining OCH shareholders, they said.