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SA Coal mulls major asset swoop Posted: Tue, 09 Oct 2007 [miningmx.com] -- SOUTH AFRICAN Coal Mining Holdings (SACMH) doesn’t exactly trip off the tongue. However, it could be worth an investor’s while keeping an eye on a potentially fleet-footed stock that listed on the JSE’s main board in August. CEO Karl Gribnitz says SACMH hopes to quickly add to its two coal producing assets. “We’re not limited to small transactions,” says Gribnitz. “We’ll use our listed environment for alternative capital sourcing.” That sounds mysterious, but Gribnitz promises to enlighten investors once he’s worked through some financing structuring plans. He promises it’ll be interesting. The takeaway is that SACMH could easily add a coal asset in excess of its current market capitalisation, around R1.68bn at the time of writing. Compare that to cash or near cash equivalents at SACMH’s half-year stage of about R12m. Standing behind SACMH is Royal Bafokeng Capital, of which Gribnitz is CEO and which has a 65% stake in SACMH. Royal Bafokeng Capital is the unlisted entity that manages the investments of the Royal Bafokeng, including some of the North West province community’s non-mining investments. Gribnitz reckons the Royal Bafokeng’s brand value makes it competitive where others have failed, particularly in stated ambitions to consolidate South Africa’s junior coal mining industry. Four main players, including BHP Billiton and Anglo American, dominate South Africa’s coal industry. The rest of the country’s coal properties are highly fractured in their ownership. Although there have been a number of juniors promising to consolidate the industry, few have been able to make much progress. “The reason is that the financial market is highly complex. Juniors often don’t have the resources,” says Gribnitz. With his background at the merger and acquisition company Gandalf Trust, Gribnitz is hoping SACMH really can rationalise the small-scale coal market. Click Here to subscribe to our daily newsletter
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