Sale Deal

R2.3bn Anglo coal sale to Seriti may hit Eskom ownership snag.

- Martin Creamer

A new aspirant South African mining champion last week announced its intention to acquire Anglo American’s Eskom-tied domestic thermal coal operations in South Africa, which would position the majority blackowned start-up as the potential second-largest provider of coal to the State electricity utility.

Seriti Resources, the company Anglo named as the proposed buyer of three Eskom-tied coal mines and four closed coal assets, is a new 79% black-owned company, which easily ticks the transformation boxes demanded by both Eskom and the Department of Mineral Resources (DMR).

The Eskom-tied mines being sold by Anglo for R2.3-billion ($164-million) are the New Vaal, New Denmark and Kriel collieries, and also part of the deal are four closed collieries, which Seriti sees as having reopening potential.

Anglo has signed a binding sale and purchase agreement with Seriti in a deal that has been two years in the making.

However, Eskom spokesperson Khulu Phasiwe said the question of the ownership of the mines remained a “sticking point” and that Eskom would be seeking an urgent meeting with Anglo to understand how the issue could be resolved.

Eskom interim CEO Matshela Koko said recently that Eskom had received an asset register from Anglo confirming that the State-owned electricity utility owned assets at the mines in question, but that these assets were not reflected on its balance sheet. The utility had also conducted an audit of all its mining assets, but had not yet disclosed the value or nature of the assets.

“However, we definitely believe we have a right to have a say over what becomes of those assets,” Phasiwe said in a telephonic interview with Mining Weekly.