‘We are embarking on this journey ... to ensure that Salungano can remain competitive amid, and responsive to, the changing conditions in which our sector is operating’
2023 was a turbulent year for Ramaite’s Salungano, formerly known as Wescoal Holdings. Following mass board resignations in July, trading in the company’s shares in August was suspended on the JSE after it failed to timeously provide its provisional report for the year to end-March. The company subsequently said this stemmed from “an unforeseen delay in the completion of the audit process”. That’s a big red flag for investors and a blow to its diversification drive to become a broader energy, minerals, agriculture and logistics investment company. It got worse.
On the same day of the JSE suspension, the company informed startled shareholders that its wholly owned subsidiary Wescoal Mining, a coal producer, had taken legal steps to apply for liquidation, prompting Salungano to launch a court application to place it in business rescue. The company’s track record on this front is not great. When it successfully applied to have its Arnot coal mine placed in business rescue, shareholders hit back by taking Salungano to arbitration, accusing it of failing to honour its funding obligations.
One imbroglio after another certainly raises questions about Ramaite’s approach, and it raises pointed questions about the future of a junior mining company that has limited options for raising capital. The JSE has only a handful of listed junior miners, and new listings on the bourse are rare. As the chickens come home to roost at Salungano, its diversification dream is looking more and more like a rotten egg.
LIFE OF ROBINSON
Ramaite was chairperson of Wescoal, stepping in as interim CEO in 2021. He is a politically connected former public servant who is no doubt finding the private sector more demanding. He is a former director-general of the Department of Public Service and Administration. He is also deputy CEO of United Manganese of Kalahari, which is linked to sanctioned Russian oligarch and ANC patron Viktor Vekselberg.