New joint venture snaps up Exxaro's Inyanda right to beneficiate coal

2015-12-09 14:01:00

EXXARO has sold its Inyanda mining right, and its washing plant and rail siding to emerging entrepreneurs, Lurco Group and Burgh Group, which intend to use it to beneficiate coal for Eskom and export, the firms said yesterday.

Eskom’s insistence that its coal suppliers be 51% black-owned is opening up opportunities for new companies.

Mzila Mthenjane, Exxaro’s executive head of strategy and corporate affairs, would not disclose the amount paid for the mine, where coal resources were mined out, but said it was a cash deal, not material in size to Exxaro.

Inyanda’s washing plant was in the mining right area, so Lurco and Burgh were assuming the mining right and associated liabilities.

Most of Inyanda’s staff were redeployed to other mines, while only a handful were left for care and maintenance. Exxaro had rehabilitated the pit and money was set aside for environmental responsibilities.

Lurco is an eightyear-old company owned by Ellington Nxumalo and Aubrey Chauke. It already supplies Eskom with coal from its own mines. Burgh Group owns various coal mines around Delmas, Witbank and Middelburg.

Each company expects coal production from its near-term prospects to be about 600,000 tonnes a month in the short term.

Their joint venture company, called Mainstream, is 51%-owned by Lurco and 49% by Burgh. Mainstream intends to process about 25-million tonnes of its own and external coal at Inyanda in five years.

It planned to secure export entitlements and Inyanda’s assets would enable it to start the process of applying for a long-term Eskom contract, Mr Nxumalo said.

Mr Mthenjane said although it was a small transaction, Exxaro welcomed the opportunity to help junior miners to develop further.

mathewsc@fm.co.za

Although it is a small deal, Exxaro welcomes the chance to help junior miners

Source: Business Day

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