BOTSWANA coal producer Minergy is planning to list on the London Stock Exchange after earlier abandoning a debut on the Alternative Investment Market (AIM).
“We looked at an AIM listing but unfortunately we ran into Brexit at the time. Now we are restarting the process,” said Morné du Plessis, CEO of Minergy.
Du Plessis was speaking at the Joburg Indaba, an online mining conference.
Minergy has targeted production of 60,000 tons a year from its Masama mine, northeast of Gaborone. The mine has the potential to scale up to 80,000 tons over time. It sells its product into the industrial markets in South Africa, Namibia and Botswana. According to Du Plessis, the operation is “nearing nameplate capacity”.
“We will try an LSE standard main market listing. We have heard there is an appetite in the UK for commodities,” said Du Plessis.
Thungela Resources, the South African coal assets of Anglo American, is due to debut in London and Johannesburg on Thursday.
According to Liberum Capital, there may be selling pressure on Thungela shares as about 15% of its shareholders are passive index-based institutions that do not seek exposure to Thungela on ESG grounds, according to the bank’s analyst, Ben Davis.
Du Plessis said coal companies had “unfairly” received a negative narrative which had resulted in making capital raising “extremely difficult” from commercial banks. However, he said partnerships with government and traders offered a funding alternative.
“The normal funding that was available ten years ago is not available. We all know that. So we have to look at new partnerships as well as the chain supply,” he said, referring to potential funding with customers and traders in return for coal supply. “I see more joint partnerships with government,” he said.
About a third of Minergy’s share register is held by retirement funds, some of which belong to the Botswana government.
Minergy listed in Botswana in 2017.