[miningmx.com] — SHANDUKA Group announced on Tuesday it has concluded a widely expected transaction which would see it increasing its stake in Shanduka Coal, acquiring just over 20% from Glencore International, to become the controlling shareholder in the coal company.
Shanduka would own 50.01% in Shanduka Coal once permission from South Africa’s regulatory authorities has been obtained, with Glencore holding the remaining stake.
Shanduka Group CEO Phuti Malabie told Miningmx the company agreed to invest R370m in cash in Shanduka Coal, together with its 30% stake in Kangra Coal, and would commit R200m for the development of future coal projects over the next five years.
Shanduka Coal said it was currently producing approximately 7 million tonnes of saleable coal per year, which was sold to Eskom and the domestic and international markets. It’s operating mines comprise the Graspan, Middelburg Townlands and Springlake collieries.
Glencore reported n September the total saleable own coal production by Shanduka Coal for the first nine months of 2011 was down 10%, although higher margin export production was up 17%. The average realised export price was up 42.% on a year ago, from $95/tonne to $136/tonne.
Malabie said Glencore’s newly acquired 43.66% stake in Umcebo Mining would also form part of the structure. However, the move by Glencore and Shanduka chairman Cyril Ramaphosa to gain control of Optimum Coal was unrelated.
“”The decision to increase our shareholding in Shanduka Coal is in line with our strategy of expanding our investment in the coal sector and becoming more operationally involved,’ Malabie said. “Glencore brings its marketing experience and track record to the table.’
