Photo by: Bloomberg
Junior miner Black Royalty Minerals (BRM), a subsidiary of the Makole Group, has been selected as the preferred bidder to acquire the Koornfontein coal mine, in Mpumalanga.
The transaction includes the mine’s port allocation at the Richards Bay Coal Terminal (RBCT).
Makole group CEO Ndavhe Mareda anticipates that operations at the Koornfontein mine will restart in the first quarter of next year.
The preferred bidder selection follows a competitive bidding process and a vote by creditors where the bid by BRM was shortlisted with Lurco Group South Africa and Orchid Mining-Smada.
However, Lurco, the initial preferred bidder, failed to raise the necessary funds to conclude the acquisition.
BRM’s bid included a multiple funding approach, comprising of offtake agreements, internal funding and facilities by Standard Bank.
The Koornfontein coal mine was placed under business rescue in February last year. The mine assets include an openpit strip mine, and two underground areas (Gloria and Blinkpan), a processing plant capable of processing 3.5-million tonnes a year and a railway siding with rapid loading.
Operations could well extend beyond 2040.
Koornfontein’s RBCT allocation has export entitlement of 1.5-million tonnes a year.
Mareda believes a combination of factors resulted in BRM’s successful bid, such as its current coal mining expertise and ability to operationalise the Koornfontein coal mine, BRM’s’ ability to service the mine, its current contracts and the fact that Eskom is an existing creditor.