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Seriti Resources interested in Optimum Coal as it looks to export

CEO wants to list Seriti Resources eventually.

South African miner Seriti Resources wants to move into exporting coal and would be interested in buying the assets and quotas of the Gupta family’s Optimum Coal, its CEO said.

Bidding for Optimum Coal would pit Seriti, which has ambitions to become a black-owned mining champion, with bigger miner Exxaro, which has expressed interest in buying Optimum’s coal export quotas.

Optimum Coal sought protection from creditors on February 20 with seven other companies owned by the Guptas, who are accused of corrupt ties to former South African President Jacob Zuma.

Zuma and the Gupta brothers deny any wrongdoing.

Optimum has not made clear if its assets are up for sale but Seriti’s CEO and shareholder Mike Teke used to own a stake in the company until Glencore bid for it in 2011.

“Yes I am interested,” Teke told Reuters on the sidelines of a mining conference in Johannesburg.

“I still believe I can run the mine, I still believe I can add value, I still believe I can change the bad things that have happened at that mine.”

Seriti already owns three coal mines acquired a year ago from Anglo American in a $166 million deal that marked the first step in creating what Teke, a former teacher turned mining boss, aims to become a publicly traded South African black-owned mining company.

Seriti is co-owned by four black anchor shareholders – Teke’s investment company Masimong Group, as well as Thebe Investments, Zungu Investments (Zico) and Community Investment Holdings (CIH).

Seriti currently produces thermal coal for power stations operated by South African utility Eskom, which collectively generate about 23% of the country’s electricity, but Teke said it wants to move into exporting coal.

“My vision is I want Seriti to move into that tier where it’s a mining house that people will think of,” said Teke, a former chairman of lobby group Chamber of Mines.

Running Optimum again would be a major step forward.

“Just like when you grow up there are things that you desire in a toy store, there are assets I desire to own,” he said, referring to Optimum Coal.

Bloomberg reports have suggested that Glencore is also weighing buying back Optimum, which it sold to Oakbay Investments, owned by the Gupta family, for R2.1 billion  ($145 million) in 2016.

Glencore declined to comment on the matter on Wednesday.

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