Steenkoolvelde – Tans in Suid-Afrika is daar heelwat Steenkoolmaatskappye en kragstasies, waarvan sommiges naby aan die steenkool geleë is . Dis net verbasend dat Eskom nie “STEENKOOL” het nie, of dalk 3e graadse steenkool aan hul verkoop word. Daar word heelwat steenkool ook uitgevoer – en die vraag kan tereg gevra word, is dit dan eties reg, moet ons nie eers ook in ons eie aanvraag/aanbod voorsien, omdat ons kragvoorsieners is vir bykans die hele Afrika wat in Suid-Afrika bly? Daar is reeds ‘n verskeidenheid groot voorsieners van steenkool of dit word uitgevoer.
Hier is die AKTIEWE steenkool myne – meestal is steenkool oopgroefmyne.
A snapshot of what will be left of the Soutpansberg with regard to present and planned mining operations. No wonder conservationists are up in arms.
The map, showing the coalfields and distribution of Karoo rocks in Southern Africa as well as the distribution of active coal mines and projects provides information about the type of coal produced, mining methods and markets supplied the collieries in South Africa.
SWART BEMAGTIGING – BLACK EMPOWERMENT
JOHANNESBURG (miningweekly.com) – The selection of Thabametsi as a preferred independent coal-fired power project has delighted black-owned mining company Exxaro, which will chip in a R3-billion first phase coal mine to supply 3.9-million tons of coal a year for 30 years to its power plant partners.
Energy Minister Tina Joemat-Pettersson earlier this week announced Thabametsi as a preferred bidder in South Africa’s Coal Baseload Independent Power Producer Procurement Programme. JSE-listed Exxaro is partnering Marubeni and Kepco in this project falling under the Department of Energy‘s long-awaited private baseload coalelectricity programme.
The power station, which is to be built in Limpopo close to Exxaro’s large existing Grootegeluk coal mine in the Waterberg, will generate 557.3 MW of electricity into the national grid, with the first coal due to be produced in in the second quarter of 2021 and the first electricity in 2022.
Exxaro began working on the first phase of the bankable feasibility study for the opencast Thabametsi mine in 2014 and envisages also potentially supplying coal to second bid window independent power producers, as well as the export of high value coal abroad.
The current regulatory developments are opening the way for Exxaro – already the largest supplier of coal to State-owned power utility Eskom – to play a role in providing private-sector-led coal power.
The company mines in Mpumalanga as well as in Limpopo, where Grootegeluk hosts a large coal beneficiation complex and supplies Eskom’s long-standing Matimba power stationas well as its new Medupi power station.
By 2017, Exxaro’s R3.8-billion Belfast mine under construction is expected to begin ramping up towards a production rate of 2.2-million tonnes of export steam coal a year and 500 000 ton of local power station coal.
The company’s investment portfolio includes a 50% interest in Cennergi, a joint venture with Tata Power, which has developed two wind farms with a combined generation capacity of 229 MW as part of South Africa’s Renewable Energy Independent Power Producer Procurement Programme.
The announcement of the third revision to the Mining Charter in June 2017 sparked a downward spiral for the South African mining industry. With the newest draft Mining Charter released in mid-June 2018, one would be optimistic that confidence could be restored with the progress in transformation and tackling legacies of the past, although there is still a long way to go and investors might likely still take time to warm to South African mining prospects. Therein lies the conundrum.
One company, soldiering on and working consistently towards a brighter transformed mining future for South Africa is Springs-based Ncamiso Mining. As industry leaders in sustainable, alternative mining solutions Ncamiso sees investment potential in unlocking the mineral wealth lodged in disused land.
“There is immense value held in the ground of old miningsites and the surrounding communities that just need the right mining approach and vision to equitably contribute to the economic growth of our country,” says Ncamiso’s MiningManaging Director, Fikile Mashinini.
Ncamiso Mining is holding the flag high for 100% black-owned mining companies while making a significant contribution to the welfare and economic growth of our country. The company is celebrating its 10th birthday in 2018 and pride themselves in their efforts towards a more balanced industry that encourages foreign investment.
KEY FACTS AND FIGURES
“The consortium comprising Vitol and Burgh Group Holdings will not be proceeding with the acquisition,” the commodities-trading house said in a statement on Monday.
The proposed deal, first reported by Bloomberg News in September 2016, would have seen Vitol and South Africa’s Burgh Group acquire Optimum Coal Terminal from the Gupta’s Tegeta Exploration and Resources. It would have given the consortium a 7.61% stake in Richards Bay and rights to ship about 8 million tons of the fuel from South Africa annually.
The Guptas are friends with South Africa’s president Jacob Zuma. In December 2015 the family, along with Zuma’s son Duduzane, bought Optimum through Tegeta for R2.15 billion ($163 million) from miner and trading house Glencore.
The purchase would have given Vitol, which handles more than 7 million barrels of oil a day and more than 30 million tons of coal annually, access to a key export facility in one of the largest coal-producing countries. Vitol has trading and marketing operations in South Africa and its VTTI unit is building a fuel-storage facility in Cape Town. In 2012, it formed a coal-trading company in neighbouring Mozambique by buying a stake in a terminal that exports coal from South African mines.
While South Africa has quality coal reserves and is well positioned to export the fuel to India and China, shipments are constrained by limited port capacity. Only shareholders have an automatic right to export through Richards Bay, which accounts for almost all of the country’s coal-shipping capacity. Other investors in the facility include Anglo American, South 32, and Glencore.
Oakbay Resources and Energy, a mining company controlled by the Guptas, will delist from the Johannesburg Stock Exchange this month after if was unable to find a new transfer secretary or sponsor to comply with exchange rules.
In November, South Africa’s anti-graft ombudsman published a report saying Zuma and some ministers may have breached the government’s code of ethics in their relationship with the Gupta family.
Companies controlled by the family were dropped by their South African bankers and auditors last year and Bell Pottinger, a UK-based public relations firm, said in April it no longer represents the Oakbay Investments holding company.
- The coal industry employed 82,248 people in 2017, representing about 17% of total employment in the mining sector
- 252 million tonnes produced in 2017 with total coal sales of R130 billion
- Since 2009, net investment in the coal industry has declined at a rate of 10% per year – from R7.3 billion to R3.8 billion in 2017
- The coal industry spent R61 billion procuring goods and services, most of it locally, thus contributing to the creation and maintaining of jobs in other industries
- 70% of coal volume is consumed domestically and more than 70% of electricity demand is generated from coal power
- Richards Bay Coal Terminal (RBCT) serves as the primary export port
- RBCT has a dedicated rail line
Coal mining’s advent in South Africa can best be traced to the start of gold mining in the late 19th century, particularly on the Witwatersrand, with the first coal in appreciable tonnages being extracted on the Highveld coal field close to the nascent Witwatersrand gold mines. However, demand began to grow, slowly at first but then exponentially as the country entered a period of industrialisation during and following World War 2. This included a major programme of building power stations, particularly on the coal fields of Witbank and Delmas, as well as Sasol’s major coal-based synfuels and organic chemicals complex at Secunda. Essentially, South Africa was building an industrial future and technical skills base founded firmly on its principal fossil-fuel resource. Searches for other fossil fuels to date have not been successful, and the country’s fossil future remains firmly founded on coal.
For many years, the coal sector remained in local private hands – largely those of the old mining houses. But, particularly during the oil crises of the 1970s, foreign oil companies vied for coal resources and established new collieries destined especially to serve export markets.
Following the democratic election of 1994, ownership was transferred increasingly into the hands of historically disadvantaged South Africans, in many cases exceeding the 26% black-ownership level specified by the Mining Charter for 2014. Eskom is further insisting that it will only sign long-term contracts with collieries that are at least 51% black owned.
The Richards Bay Coal Terminal (RBCT) was established in 1976 as a partnership between the then leading coal companies with an initial annual capacity of 12Mt. This has steadily increased with a fine balancing of the needs of rail capacity to carry coal from the inland collieries to the coast to its current 91Mt design capacity. For many years, as this export capacity was being expanded, seaborne coal prices were generally greater than domestic prices. Consequently there was considerable competition for capacity at the RBCT and the rail line that serves it. However, the commodities slump of the past few years and the glut of bulk commodities on international markets has resulted in export prices falling by more than half since 2013 as exporters from competing countries struggled to maintain their market shares.
As we approach the century’s second decade, the power stations built over 30 years ago will remain operational at least until mid-century. Eskom is busy building two modern thermal power stations, Medupi and Kusile, which are the country’s northernmost, and based on coal reserves in Mpumalanga and Limpopo provinces. No other thermal stations are in the planning stages as government and state-owned Eskom consider the feasibility of taking the nuclear power route.
Excluding Sasol, the coal sector employs in the region of 82,248 people, which is the third largest group in the mining sector after gold and platinum group metals. Their annual earnings are in the region of R22 billion.
Modi Mining is a 100% black South African-owned company founded and owned by mining engineer and entrepreneur Mr Samuel Molefi and female entrepreneur Ms Christina Motlapele Molefi. The company was established with the sole objective of rendering differentiated contract mining services and to be a supplier of choice to the mining industry. Modi Mining started operations in 2011.
COAL COMPANIES IN SOUTH AFRICA
Over 80% of South Africa’s saleable coal is produced by five prominent coal mining companies, namely:
- BHP Billiton’s Energy Coal South Africa (BECSA)
- Anglo American Thermal Coal
- Xstrata Coal
- Exxaro Resources
- Sasol Mining
Of these major coal mining companies, BHP Billiton is one of Eskom’s biggest suppliers, and one of the largest suppliers to the seaborne energy coal market. Anglo American’s coal business owns and operates nine mines, and is currently working on several projects aimed at boosting output to 90 million tons per annum, while of the top five coal mining companies, Xstrata Coal is South Africa’s third largest coal exporter.
Formerly part of Kumba Resources and now merged with Eyesizwe Coal and Namakwa Sands, Exxaro is among the most diversified coal mining companies. It currently has several Greenfield and expansion projects under way, including a coal mine in the Waterberg field that will supply between 13 and 15 million tons of coal per year for export, and a proposed 1,200 MW coal-fired power station, near Lephalale in Limpopo, for which it has begun undertaking an environmental impact assessment and public participation process. Sasol Mining, which uses the majority of its coal in Sasol’s Secunda-based coal-to-liquids synthetic fuels plant, rounds out the top five major coal mining companies.
The role and influence of empowered coal mining companies has been steadily increasing, particularly since the 2004 implementation of the Mineral and Petroleum Resources Development Act (MPRDA), and other active coal mining companies include Optimum Coal, Shanduka Resources, Kangra Coal, Total Coal South Africa, and Wescoal, among others
In terms of the MPRDA’s use-it-or-lose-it principle, coal mining companies holding unused reserves, and those that have shut down unprofitable operations, risk losing their rights. As a result, the major coal mining companies have freed up coal deposits deemed uneconomical to mine, and have made noncore assets available to BEE coal mining companies, while also entering into numerous joint venture agreements.
ARM Coal was formed in July 2006 in partnership with global diversified mining group Xstrata Coal South Africa. The joint venture includes an economic interest of 20.2% in Xstrata Coal Operations in South Africa, Participating Coal Business (PCB) and a 26% attributable beneficial interest in Goedgevonden (GGV).
Mbuyelo Coal has a rich footprint in the Mpumalanga province of lush South Africa. It is born from the company Mbuyelo Group (Pty) Ltd which has its main business in the coal mining industry and is similarly growing its portfolio in other businesses such as the properties, farming and contracting industries.
Mbuyelo Coal is groomed with the same principle of unparalleled effort in all we are tasked with towards building a well-grounded company. Equivalent to sheer determination to succeed, our goal involves making sure our stakeholders get returns on their investment. The de-racialization of the South African economy as a whole, brought relief and what may have started out as mere dreams turned out to be attainable even though it meant arduous and unceasing effort!
AFRIKA / AFRICA
At the end of March, the Gupta family and President Jacob Zuma’s son Duduzane spent R2.15-billion on Optimum Coal, either a true lemon of a company or a decent bargain at the price, depending on which set of books you look at.
But for the company founded by Deputy President Cyril Ramaphosa, Shanduka Resources, the same transaction came at a hard cost of more than R128-million.
Not that it was close to being the biggest loser.
The finalisation of the Optimum sale was the final nail in the coffin of a once-lauded series of empowerment transactions that placed a select few among the wealthiest in the land. Between them the empowerment entities involved lost not much under R1-billion.
It also wiped out at least R213-million in paper assets for a community trust that once helped matric pupils in Mpumalanga pass mathematics, and another minimum of R213-million for an employee trust that sought to cushion mineworkers from disasters such as large medical bills not covered by their own insurance.
That left as clear winner – in a sequence of events that included loud accusations of political inference and dirty dealing – a consortium of banks, which were repaid in full the R2.7-billion in debt amassed by Optimum.
At the end of March, Tegeta Exploration, a company jointly controlled by the Gupta family and Duduzane Zuma, took control of all Optimum’s assets, making Tegeta the owner of both an Eskom supply contract and the mines that are to provide the coal.
Their R2.15-billion in cash – the origins of which no party involved would reveal – did not fully settle the loans that had been advanced to Optimum by Investec, Nedbank and the parent company of First National Bank.
Settling the remainder was left up to the single largest previous shareholder in Optimum, international commodities trader Glencore, which put up another R518-million.
That payment bought Glencore, and its fellow former shareholders, out of R2.18-billion in penalties Eskom says Optimum owes it for supplying it with poor-quality coal.
The burden of that potential payment now falls almost entirely on the Gupta family (see “The lemon – or bargain – the Guptas bought” ).
Other former and present shareholders did not contribute to buying their way out of the Eskom trouble, but were left with nothing as the deal rolled over them.
The most tangible loser was Shanduka Resources, the company created by Ramaphosa in 2002.
At the time of the Tegeta purchase, Optimum owed Shanduka more than R128-million in what one insider said was a loan Shanduka had extended to keep Optimum afloat during one of its many troubled periods.
Ramaphosa sold his last stake in the Shanduka group almost exactly a year ago, fulfilling a promise – to divest himself of all business assets that could create perceived conflicts of interest – which he made when he took up the deputy presidency.
The sale was between two private companies that volunteered no information on it, so it is not known how the Optimum loan was valued. Shanduka’s buyer (and the ultimate loser in the Optimum transaction), the Pembani Group, an obscure investment holding company, flatly refused to answer any questions about the matter, citing “a policy not to comment on its investments activities and/or market speculation”.
Ramaphosa personally joined with Glencore when it started to take control of Optimum in 2012. The terms of the partnership were never disclosed, but Ramaphosa was believed to have owned an equity stake worth up to R1-billion at its peak.
Optimum was created in a 2007 empowerment transaction by BHP Billiton that was still subject to bitter litigation as recently as February 2015, as one party excluded from the deal tried to shoulder its way in.
Optimum was a prize worth fighting for. When it listed on the JSE in March 2010, its value rocketed to R8-billion, making some of its larger shareholders hundreds of millions of rands – on paper – overnight.
These included white mining and mineral investors with somewhat dubious track records, but also the likes of Eliphus Monkoe, who would in 2012 be named the 10th-richest black African in South Africa.
Monkoe left South Africa after the 1976 uprising, finished his schooling in Nigeria and trained as a mining engineer in Moscow and Siberia.
He worked in junior positions in East Africa and Zimbabwe before joining Anglo Coal as a trainee in 1991. He worked his way up through Sasol and Ingwe, before putting together an empowerment group at his then employer, BHP. By 2012 he was apparently worth R530-million.
Monkoe died in mid-2014. His investment company owned 5.28% of Optimum at the time of the Tegeta purchase as one of the empowerment companies that retained its stake when Glencore and Ramaphosa took control of Optimum in 2012 and delisted it. At a company value of R2.15-billion that stake would have been worth R114-million.
Other owners at the time of the Tegeta acquisition included an employee trust and a community trust, which each owned 9.93% of Optimum. In 2012 the community trust had amassed about R12-million in capital from dividends and was spending about R3-million a year on programmes that, at their height, provided school lunches to 2 430 children in the municipality where Optimum operated.
The lemon – or bargain – the Guptas bought
If Optimum Coal were to be liquidated, its assets would fetch about R1.5-billion, according to a recent valuation. It runs coal mines in a country with a huge, and growing, reliance on coal, and has access to export facilities to feed the coal hunger of the likes of China. At the end of February it had some R81-million in cash and near equivalents in the bank.
By those measures, the R2.15-billion Tegeta paid for Optimum has the makings of a fair price. But that is before you look at the operational numbers that plunged it into bankruptcy protection in the first place.
Business rescue documents show that the coal Optimum exports earns it about R579 a tonne, which earns a nice round 60% gross profit before tax and mandatory expenses relating to labour and surrounding communities.
But for the first three months of this year, at least, export coal was not an important part of Optimum’s business. A full 88% of its total production went to Eskom – at a price of just over R155 a tonne, making for an average price of R208 a tonne of coal sold.
In the month of March, about half that, or R102 a tonne, was required just to wash the raw coal and transport it by rail, through roads and on trucks.
By the time the much more expensive mining costs – blasting, labour, electricity – and general overheads were included, it actually cost Optimum R178 for every tonne of coal it sold in March.
As a result the company burned through R101-million in cash in March and R105-million in February.
But the true threat Optimum faces is the looming Eskom penalty claim. Eskom believes Optimum owes it R2.18-billion for failing to provide coal of an agreed-upon quality.
In a series of provisions that seem iron-clad, Tegeta took full and final responsibility for that potential debt. And Tegeta’s guarantees were underwritten by Oakbay Investments, the Gupta family vehicle that owns or controls most of the family’s assets, including the listed uranium miner Oakbay Resources.
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