SA will soon know new owners of Optimum Coal, Koornfontein mines

BUSINESS rescue practitioners (BRPs) have narrowed the final list of bidders for Optimum Coal and the Koornfontein mine to five and the winners are expected to be announced over the next month.

Sources directly involved with the process told IHS Markit that the winner for the 3.5 million tons per year Koornfontein is expected to be announced by the end of September, and the new owner of the troubled 10 mt/y Optimum a few weeks later.

According to the sources the assets could be awarded together or separately.

The process has been wrought with legal action against the BRPs and allegations of corruption since Gupta-owned Tegeta Exploration and Resources, owner of the mines and several other companies, has been placed under business rescue in February 2018.

Since then, production has come to a virtual halt, leaving hundreds of workers unpaid and its main customer, Eskom, scrambling for replacement supplies.

Seriti Resources, the fast-growing, black-controlled coal miner has expressed interest in Optimum after snapping up Anglo American’s New Denmark, Kriel and New Vaal recently. A major supplier to Eskom, Seriti will soon be South Africa’s second biggest coal producer after emerging yesterday as South32’s chosen one: the company that has the right to buy control of its 28 million tons a month in South African coal production of which half is sold to Eskom.

Other contenders for the Gupta-owned coal interests were a consortium led by African Exploration Mining and Finance Corporation, trading house Lurco Group and Project Halo, a consortium backed by Macquarie Group. It isn’t clear whether AEMFC and Lurco made it to the shortlist, but creditors rejected Halo’s advances in December already.

The latest bidding round is expected to be more successful as Optimum’s creditors, particularly Eskom, have been more engaged in the process, according to IHS Markit.