JOHANNESBURG, November 27 (ANA) – Australian miner South32 Limited said on Monday it would manage its South Africa Energy Coal (SAEC) as a stand-alone business from April 2018 and invest R4.3 billion to extend the life of its Klipspruit colliery in Mpumalanga by approximately 20 years.
SAEC operations include four coal mining operations, as well as three processing plants near the towns of eMalahleni and Middelburg, in the coalfields of Mpumalanga, producing energy coal for the domestic and export market.
South32, a diversified mining, and metals company, said SAEC required ongoing investment to sustain production and meet its domestic supply obligations.
SAEC would be restructured and managed separately from the rest of the group with tailored functional support, systems and governance processes in a bid to improve its financial performance.
“This process will also allow us to further simplify our organisation and unlock additional value for shareholders,” South32 chief executive, Graham Kerr said.
“We will also seek to increase the local ownership of South Africa Energy Coal, consistent with our commitment to South Africa’s economic transformation, and may ultimately list the business on the Johannesburg Stock Exchange.”
Kerr said the approval of the R4.3 billion Klipspruit Life Extension project would secure the future of the colliery for at least another 20 years, ensure employment for 740 people and create 4,000 jobs during construction.
“The investment is expected to generate an internal rate of return on investment of more than 20 percent by unlocking 616 million tonnes of resources at the Klipspruit South and Weltevreden deposits, and fulfilling around half of our current rail obligations with Transnet,” he said.
Development was expected to commence in the current quarter, with first coal expected from the open-cut operation in 2019 financial year.
South32 said it would commence a process to broaden the ownership of SAEC once it had been established as a stand-alone business.
This would present opportunities for Broad-Based Black Economic Empowerment (B-BBEE) entities, employees, and communities, and could lead to a listing of SAEC on the Johannesburg Stock Exchange.
South32 owns 92 percent of SAEC, with the remaining eight percent held by a B-BBEE consortium, led by Pembani Holdings.
– African News Agency (ANA), Editing by Stella Mapenzausw
