COAL miner Seriti Power is considering laying off around 600 employees at its Klipspruit colliery in South Africa’s Mpumalanga province or face imperilling the group.
Citing a letter by the mine’s manager, News24 said a combination of Transnet woes, a decline in domestic coal prices and related operational issues had sent Klipspruit’s delivered cost to R1,314 per saleable ton. Set against this the current average domestic coal price is R400/t, a fifth below the mine’s budgeted R500/t.
While export prices have recovered to above $100/t – higher than the mine’s budgeted price – Seriti had difficulties shipping sufficient export volumes. It is also burdened by the cost of sending more material to the domestic market as a result.
The outcome, according to News24, is that Klipspruit could lose between R657m and R949m in the 2024 financial year if no action is taken. “The projected losses for [Klipspruit] are of such a magnitude that it does not only impact the future of Klipspruit itself but the entire Seriti group,” said the letter, signed by Ndumi Khoza, Seriti’s chief people officer.
Seriti Power – which consists of collieries acquired from South32 in 2021 – employs 3 554 permanent employees in South Africa, 826 of which work at Klipspruit, said News24. Seriti said 775 employees may be impacted, 605 of which could be made redundant.