Coal producer Buffalo Coal is awaiting the submission of possible final offers from bidders interested in investing in its Aviemore mine, in KwaZulu-Natal.
The mine has 18 months of life-of-mine (LOM) reserves left. To extend the LOM to 15 years, R445-million of additional capital is needed to open up a new adit at the mine.
NorthCott Capital was appointed to embark on a process to obtain the required additional funding and a bidding process commenced early in June.
Indicative offers have been received and bidders have until the end of this month to submit final proposals.
Buffalo has warned that there can be no guarantee that any final offers will be received.
It has also warned that its only other operation, the Magdalena colliery, also in KwaZulu-Natal, will be unable to carry the company’s full operational costs should the Aviemore adit project not proceed.
Meanwhile, Buffalo’s run-of-mine (RoM) production for the second quarter decreased by 20% year-on-year to 288 055 t, as a result of a 39% year-on-year decrease in production at Magdalena.
This was offset, to some extent, by the performance at Aviemore, where production decreased by 1% year-on-year.
Anthracite sales increased by 8% year-on-year in the second quarter, while bituminous coal sales fell by 20% year-on-year.
Buffalo’s revenues for the quarter improved by 34% year-on-year to R195.70-million.