[miningmx.com] – STRIKE action at its Mooiplaats colliery had created
the conditions of a perfect storm for Coal of Africa (CoAL), which is also contending
with depressed thermal coal prices and corporate uncertainty.
This is the view of Imara SP Reid analyst Steve Meintjies, who said that the three
factors were the reason CoAL’s share price plumbed fresh lows yesterday. Meintjies
was speaking to BDLive, which reported on the strike.
“What we are seeing here is a perfect storm. You’ve got the issue of the strikes, weak
coal prices and questions as to whether Exxaro will exercise its 30% option in the
Makhado project,’ Meintjies said.
Coal prices at Richards Bay have slumped back down to $82/t levels, while Exxaro
Resources is expected to take a decision at the end of the week whether or not it will
invest in Makhado, CoAL’s promising coking coal deposit in South Africa’s Limpopo
province.
The strike action could not come at a worse time for CoAL, which recently refinanced
its balance sheet after issuing shares to Investec. CoAL CEO John Wallington has said
in the past that the company’s balance sheet is too constrained, given the company’s
ambitions.
Some 368 miners had downed tools at CoAL’s Mooiplaats colliery yesterday after
rejecting a 22% wage increase offer.
The wage offer replicates that accepted at Lonmin two weeks ago and which ended a
six-week strike at the platinum firm’s Marikana mine. Mooiplaats workers,
represented by the National Union of Mineworkers (NUM), are seeking a 33% increase
instead.
NUM obtained a certificate to embark on a strike on September 18. CoAL turned to the
Commission for Conciliation, Mediation and Arbitration (CCMA) to mediate, in an
attempt to prevent the strike.
“Unfortunately, the mediation process was not successful, resulting in the workers
going ahead with the strike,’ Wallington said in a statement.
Mooiplaats employs 368 people and 176 are NUM members, according to BDLive,
which reported on the strike. The union did not respond to several requests for
comment yesterday, said BDLive.
Although the strike was protected, the company said it would apply the “no work, no
pay’ principle.
