‘Even if Gomwe remains MC Mining’s CEO, he may find it’s become even harder to fund coal’
MC Mining’s claim to fame is a large coal resource called Makhado, located in South Africa’s Limpopo province. Unfortunately, successive management at the firm, previously known as Coal of Africa, has failed to develop it. Based on recent events, Makhado is set to remain fallow for a while longer. A proposed cash takeover offer by MC Mining’s largest shareholders, Senosi Group Investment Holdings and Denocept Proprietary, which own 23.4% and 6.9% and are said to represent the wishes of 64.5% of total shareholders, was rejected by an independent committee established by the coal company. It ruled the proposed takeover failed to identify a firm price as it only ‘guided’ to a 20 and 23 Australian cents per share offer. Quite where the offer stands now is anyone’s guess.
For starters, Gomwe rarely, if ever, speaks with the media; secondly, MC Mining’s share price has sunk back to its pre-offer levels of about 14 Aussie cents. In the meantime, Makhado – estimated to cost $96m at the last reckoning – remains unfunded although Gomwe was able to raise A$40m via a rights issue in July 2023. Even if Gomwe stays MC Mining’s CEO, he may find it’s become even harder to fund coal. About half of Makhado’s 46 million tons of saleable resource is thermal coal, which is unpopular with banks (the rest is metallurgical coal used in steelmaking). Lenders also have to take on board the persistent uncertainty of how a new project will access South Africa’s limited rail and power infrastructure. Time is not MC Mining’s friend.
LIFE OF GODFREY
Gomwe is a chartered accountant by profession with a BAcc degree from the University of Zimbabwe and an MBL from Unisa. He enjoyed a high-flying corporate career after joining Anglo American in 1999, becoming CEO of Anglo American’s global thermal coal business as well as COO of Anglo American South Africa and head of group business development Africa. Other roles he has filled include CEO of Anglo American Zimbabwe, and he sat on various Anglo company boards including Kumba Iron Ore, Anglo American Platinum, Highveld Steel & Vanadium and Mondi South Africa.