Makole’s Black Royalty Minerals Wins Bid For Koornfontein Coal Mine
This follows a competitive bidding process and a vote by creditors where the bid by Black Royalty Minerals was shortlisted with Lurco Group South Africa and Orchid Mining-Smada. Lurco Group, as the initial preferred bidder, failed to raise the funds necessary to conclude the acquisition.
BRM’s bid included a multiple funding approach, comprising of offtake agreements, internal funding and facilities by Standard Bank. It is required to fulfil certain conditions by Friday 01 November.
When Koornfontein coal mine was placed under business rescue in February 2018, Black Royalty Minerals placed a bid for its acquisition. Black Royalty Minerals (Pty) Ltd, a division of the Makole Group has interests in iron ore, platinum, chrome, graphite, gold as well as coal mining interests in the Waterberg.
This brings to finality the uncertainty created by closure of the Koornfontein mine, which will bring much needed economic activity to surrounding community, the Mpumalanga region and surrounding businesses.
Makole Group’s CEO Ndavhe Mareda believes that a combination of factors resulted in BRM’s successful bid: its current coal mining expertise and ability to operationalise the Koornfontein coal mine, BRM’s’ ability to service the mine, its current contracts and that Eskom is an existing creditor.
“From the time BRM started operations at the Chilwavhusiku Colliery in Bronkhorstspruit in January 2018, we have strategically focused on expanding our operational footprint. The bid for Koornfontein coal mine is aligned with our existing focus and expansion strategy which combines local operations with a strong export component,” he says.
Koornfontein’s mine assets include an open pit strip mine, and two underground areas (Gloria and Blinkpan), a processing plant capable of processing 3 500 000tpa (three and a half million tonnes per annum), a railway siding with rapid loading. Operations can extend well beyond 2040. Koornfontein’s Richards Bay port allocation has export entitlement of 1 500 000tpa (one and a half million metric tonnes per annum).
Mareda anticipates that operations at the Koornfontein mine will re-commence in quarter one of 2020.