South Africa's Exxaro Coal Proprietary Limited (Exxaro) has announced that it believes there will be an impairment loss of R5.36 billion ($505.4 million) in total regarding its investment in the Mayoko iron ore project in Congo, as a result of delays as well as higher project development costs.
Exxaro said that the consolidated net operating profit for the group as well as attributable earnings per share for the six-month period ending June 30, 2014 are expected to show a decrease of more than 20 percent compared to the corresponding period in 2013, mainly due to the pre-tax impairment loss.
As SteelOrbis previously reported, in March this year Exxaro said that it would not allocate any more funds for the Mayoko project in 2014 and would focus on finalizing agreements on the usage of existing port and rail facilities. This was expected to be completed in the first half of 2014. However, to date, Exxaro has not been successful in concluding the definitive port and rail agreements for the project.