Keaton left tapping fingers on Vaalkrantz ministerial consent

Mandi Glad, CEO, Keaton Energy

KEATON Energy CEO, Mandi Glad, expressed her disappointment with the time it was taking to win ministerial consent for the sale of the firm’s VaalKrantz anthracite mine.

Keaton put the Vaalkrantz mine on care and maintenance in May last year and laid off 80 employees a few months later after first agreeing to sell it to Bayete Energy Resource for just over R40m.

The sale, which did not include the Braakfontein Colliery project, followed a fraught period with the mine which encountered difficult geology and was loss-making. The final straw was revelations of major fraud at the mine – a development that exhausted management patience

“Section 11 consent was applied for on May 9, 2016,” said Glad in Keaton’s third quarter update in which it said its only other asset, the Vanggatfontein colliery in Mpumalanga province, produced record cash generation.

“It is disappointing to note that this has still not been granted notwithstanding the new owner’s commitment and ability to re-open the colliery and generate much-needed employment opportunities in an already deprived area,” said Glad. Vaalkrantz is situated in South Africa’s KwaZulu-Natal province.

This is not the first time Keaton has vented its frustration with government procedures, specifically those of the Department of Mineral Resources.

The company waited more than a year for the grant of an Integrated Water Use Licence (IWUL) for its R300m Moabsvelden project, eventually issued in October. As it happened the delay with this licence was not a complete disaster as it allowed Keaton time and space to sit out a slump in coal market prices.

Commenting on its third quarter figures, Glad said Vanggatfontein had sold 531,386 tonnes of thermal coal to Eskom, slightly down on tonnes sold in the quarter of the previous financial year.

However, the production of 5-seam metallurgical coal was stopped owing to poor market conditions. This allowed Keaton to make the 5-seam plant available for a 12-month toll washing contract. A total of 69,513 tonnes was toll-treated in the plant.

“As usual, our long life Vanggatfontein colliery has performed consistently and continues to generate excellent production and cash flow numbers,” said Glad. Growth via the adjacent Moabsvelden remote pit remains a high priority for the group in the short term,” she said.

Glad told Miningmx previously that production from Moabsvelden, which was really a satellite operation to Vanggafontein, would virtually double cash flow for Keaton.

All this talk of cash flow must be music to the ears of companies like Coal of Africa which is believed to be one of the suitors involved in the proposed takeover of Keaton.

Keaton issued a cautionary announcement on January 11 saying that negotiations continued. Asked for details, Glad told Miningmx that the matter could be resolved by the end of the month.