OWN CORRESPONDENT, Johannesburg | Wednesday
IN a massive black empowerment deal, Anglo Coal and Ingwe have sold coal interests worth R360m to Eyesizwe Coal to create the fourth-largest coal producer in South Africa.
The transaction, initiated by Anglo Coal and Ingwe, involved selling coal interests previously held by these two companies and known provisionally as NewCoal, to Eyesizwe Coal, creating a large, balanced, financially viable black-controlled coal mining group which will produce around 18 million tons of coal per annum, with a turnover of just under R1bn in 2001.
Other significant components were the contribution by Gold Fields of South Africa Limited of large additional coal reserves and the cession by Eskom of its coal supply agreements in respect of the Matla and Arnot Power Stations to Eyesizwe.
Anglo Coal and Ingwe will retain 11% and 9% equity interests respectively, in Eyesizwe and have undertaken to hold this interest for at least two years.
Both companies have also entered into Service Agreements in terms of which they will provide technical services at market related rates to assist in the efficient running of Eyesizwe’s operations.
The effective date of the transaction is July 1 2000, subject to approval of the Competition Commission.
Commenting at the signing ceremony, James Campbell, Executive Director of Anglo American plc and Chairman of Anglo Coal said: “This empowerment initiative brings to fruition an important development within the South African mining industry in general, and coal, in particular by having large volume operations transferred to an empowerment group, and at the same time, having a substantial resource base for its long term success.
Mick Davis, Executive Director, Billiton plc and Chairman of Billiton Coal, said: “Our agreement with Eyesizwe is a landmark in South Africa – the process can be a role model for future black empowerment initiatives, and in Eyesizwe, I believe we have a solid, black empowered company joining the South African coal mining industry and which has the potential to develop into a major resource company.”