JOHANNESBURG (miningweekly.com) – Junior coal mining and trading group Wescoal’s ambitious black empowerment plans, which are key for the JSE-listed group’s contracts with power utility Eskom and other export opportunities, are likely to come to head by December 2016.
Speaking to Mining Weekly Online prior to a shareholder update presentation in Rosebank, on Tuesday, Wescoal’s acting CEO Waheed Sulaiman said the company’s decision last year to embark on a 51% black economic-empowerment (BEE) structure would improve stakeholder value, meet the legislative requirements now in place and set a precedent for transformation in South Africa.
The former executive director for commercial and strategy, who temporarily took the helm in April following the exit of incumbent Andre Bojé, noted that the December 2016 deadline provided a reasonable amount of time to develop a workable, sustainable shareholder- and regulation-approved strategy.
Wescoal reiterated that the process of moving towards a majority black-empowerment shareholding had no detrimental effect on day-to-day business and that all contracts remained firmly in place.
“The underlying solid and steady growth path remains intact as the foundation for projects to take the group to the next level of stakeholder value,” advised Sulaiman.
Meanwhile, the group, which aimed to select a permanent CEO by December, would continue to implement long-standing strategies and policies.
The company’s strategies, which were on the “right path”, would remain the same – Wescoal just needed to consider its next steps.
Wescoal, which already delivered two-million tons of coal a year through its successful Khanyisa and Intibane operations, planned to ramp up to four-million tons of coal a year by 2016 as it implemented plans to bring its R170-million Elandspruit project online.
The group had embarked on several infrastructure and operational initiatives before and since obtaining the long-awaited water-use licence for the Mpumalanga-based operation, and aimed to produce first coal within 16 weeks of receiving funding for the mine.
The water-use licence was deemed the “starting hurdle”, enabling Wescoal to kick off work on the 40.17-million gross tonnes in situ project with a 12-to-15-year lifespan.
Wescoal secured R200-million in funding from Investec Bank – a R180-million five-year term loan and a R20-million five-year working capital facility – the conditions of which the company was in the process of meeting.
Wescoal COO Dutch Botes told Mining Weekly Online that all regulatory approvals were in place, with the mine design finalised and optimised and a mining contractor on standby for site establishment.
Discussions were also under way for anchor client Eskom to conclude a long-term coal supply contract.
The recently acquired Muhanga coal processing plant, which Wescoal bought in November 2014 for R40-million to process the Elandspruit run-of-mine (RoM) was operational and optimised after processing excess RoM in the market to supply the existing customer base.
While the project was important to doubling the coal output of Wescoal, Botes stressed that the two other projects, namely the Khanyisa and Intibane collieries, near Ogies, in Mpumalanga, were success stories for the company as their mine lives had been extended.
The life-of-mine (LoM) of Khanyisa had been extended by three or more years as adjacent property was developed, while Intibane boasted a LoM extension of two years.
“We are showing the market that we are successful in this space,” noted Sulaiman, adding that he would like Wescoal to be seen as an example of a sustainable growth business bringing about change and as an anchor for the transformation story in South Africa.