Wescoal commits to close BEE deal by December

COAL mining junior Wescoal has announced it will post a 50% increase in earnings for the financial year to end-December above the 15.7c a share earnings reported for its 2014 financial year.

In a trading statement released today, the company also announced that acting CEO, Waheed Sulaiman, has been confirmed in the position of CEO from April 1. Sulaiman was appointed acting CEO in March last year after Wescoal’s founding CEO Andre Bojé resigned.

Miningmx reported at the time that Bojé was at loggerheads with the company’s chairman, Robinson Ramaite, over the future strategy for Wescoal. It was understood that Ramaite had frustrated a takeover offer for Wescoal from an international company and was intent on building up his own stake in the company.

Repercussions from that bust-up became apparent in November at Wescoal’s annual general meeting when shareholders succeeded in voting down the proposed remuneration policy for non-executive directors while 37% of shareholders also voted against the re-election of certain non-executive directors but were not able to prevent this.

Other significant management changes announced today at Wescoal are that Thivha Tshithavhane will be appointed business development director from April 1 while Dutch Botes’ contract as head of Wescoal Mining has been extended for another three years.

Tshithavhane has a degree in chemical engineering and is currently GM at United Manganese of Kalahari. The statement added that a new CFO had been identified and the appointment is being finalized.

The bulk of Wescoal’s future production will be sold to Eskom which has demanded its suppliers meet a black economic empowerment (BEE) ownership requirement of 50% plus one share but Wescoal’s current BEE shareholding stands at 42%.

According to the trading statement: “The company is confident it will meet this requirement by the December 31, 2016 deadline. Eskom’s requirement of 50% plus can be achieved through a BEE Trust and/or partnerships with BEE ownership entities as well as current BEE shareholders increasing their holdings or combinations of all of the above.”

The company added that the R52m equity injection raised in November was “sufficient to initiate crucial de-risking and optimisation projects across the Wescoal group. Wescoal is fully funded from an operational perspective”.

Wescoal’s flagship mine is the Elandspruit Colliery which, according to today’s statement, is now producing at a steady state and meeting its production target of 165,000t ROM (run-of-mine) per month on a continuous basis.