South African chemical and synthetic fuels group Sasol on Tuesday named Eyesizwe Coal, the largest black-owned, -controlled, -operated and -managed coal-mining company in South Africa, as its lead black economic empowerment (BEE) mining partner.
Sasol chief executive Pieter Cox said that the two companies have entered into a memorandum of understanding that covers various areas of possible cooperation, which could lead to a mutually beneficial long-term relationship. Potential synergies in the coal export and power and steam generation coal supply markets will be explored.
“Sustainable BEE ventures require time, capital, skill and foresight to develop, especially if we are sincere about ensuring long-term success, and we at Sasol are satisfied that Eyesizwe Coal fulfils all strategic requirements to advance our BEE initiatives in the mining sector,” Cox said.
Eyesizwe Coal chief executive Sipho Nkosi said: “Sasol Mining and Eyesizwe are of the opinion that empowerment is not only about equity ownership and financial leverage, but more about transformation, capacity building and skills transfer on a proactive but managed basis, with the objective of ensuring long-term growth and sustainability of the companies, their employees, the communities in which they operate and the country as a whole.”
Minister of Minerals and Energy Phumzile Mlambo-Ngcuka said: “The proposed deal between Sasol Mining and Eyesizwe Coal represents an important milestone in realising the objectives of the Mining Charter. It will address, among other things, the issue of operational involvement of Eyesizwe Coal in the running of the current and envisaged new operations — thus creating an environment in which skills transfer will take place.
“Eyesizwe Coal is a hands-on company, which has developed expertise in the coal sector. The location of the assets of these companies could create a synergy in the way these companies operate. The proposed deal will open up new business opportunities for Eyesizwe Coal and also pave the way for export markets.
“The Department of Minerals and Energy would like to see more of the deals that address upfront issues of community development; operational involvement and employment equity. I wish these two companies success in this proposed transaction.”
Sasol Mining, the second-largest coal mining company in South Africa with production of 51-million tons per annum, supplies coal as feedstock to Sasol’s petrochemical plants and export markets. Its largest operation is located at Secunda in Mpumalanga where it mines about 46-million tons of coal a year from five mines.
Eyesizwe’s total coal production is approximately 25-million tons a year, making it the fourth-largest coal mining company in South Africa. Its largest operation is also located in the same region as Sasol’s, from where its Matla mines supply approximately 14-million tons a year of coal to Eskom’s Matla power station.
Both parties have extensive coal reserves and resources, are coal exporters with Richards Bay Coal Terminal shareholding and believe that a closer association could unlock numerous synergies. This could be achieved by pursuing various possible joint initiatives strategically to position themselves to take advantage of present and future energy and power generation opportunities.
Information relating to possible joint initiatives between the partners will be announced at appropriate times, when sufficient progress has been made and finality on agreements has been reached. — I-Net Bridge