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No mining charter in sight

Anglo selling SA thermal coal operations – Mineweb editor, Warren Thompson.

SIKI MGABADELI:  Let’s chat now to the editor of Mineweb, Warren Thompson, who takes us through some of the main stories of the week. Warren, we are going to be talking about Anglo American’s sale of the Eskom-linked thermal coal operations in South Africa.

But first I just want to chat about that delay in the mining charter being released. The minister told us with much fanfare at the Mining Indaba that we are going to get it by March 31. Well, today is April 10.

WARREN THOMPSON:  Correct, Siki. If you’ve been following anything in mining, and certainly on the political economy side of things, you’d know that the mining companies and the industry have been begging for that charter to be released. It’s part of the steps to remove the policy uncertainty in the industry, which is seen as going backwards at a rapid rate.

So yes, unfortunately, no mining charter yet. I checked with the Chamber of Mines, and they weren’t sure when it was coming, either. So it seems for the foreseeable future we are not going to have one.

SIKI MGABADELI:  So that political uncertainty then affects investment decisions at a time when we are seeing commodity prices rising again. We are shooting ourselves in the foot.

WARREN THOMPSON:  Absolutely. Maybe we’ll talk about the Anglo deal. The big mining companies are leaving, they are coming in. These guys – the Glencores, the BHPs and the Anglos of the world – have the capital to develop projects and create jobs. They are leaving. So what does it say about the South African mining industry?

SIKI MGABADELI:  Anglo is selling those thermal coal operations in South Africa. Tell us what that is. Is that part of their broader restructuring?

WARREN THOMPSON:  That’s correct, Siki. It’s part of their portfolio restructuring. They’ve identified pillars where they really want to focus their capital – platinum, copper. And so with the coal, and certainly the Eskom-tied thermal coal operations, they have now sold that to Seriti Resources, which is headed by Mike Teke, who is the outgoing chairman of the Chamber of Mines. It realises R2.3 billion for them – not big on the global scale, but certainly it’s consistent with their strategy of getting their portfolio of assets right. And it does this.

SIKI MGABADELI:  And who is Seriti Resources?

WARREN THOMPSON:  Inside Seriti you’ve got a couple of players. As I understand it, the shareholding is 79% black-owned. It’s a consortium consisting of Teke’s Masimong Group Holdings, Thebe investment Corporation, Zungu Investments Company and a group called Community Investment Holdings Projects. So it’s a large majority-owned BEE component which is consistent with what Eskom want for their supplies. They’ve said they would be interested in buying other assets Anglo would put up for sale. So we’ll see how that progresses in the future.

SIKI MGABADELI.  Alright, we’ll leave it there. Thanks, Warren. Warren Thompson is the editor of Mineweb.

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