TORONTO (miningweekly.com) – Three directors of Homeland Energy Group (HEG), including CEO Stephen Coates, have resigned effective June 5, the firm announced on Monday.

Robert Munro and Neil McLoughlin have also resigned as directors.

They will be replaced by three directors nominated by HEG shareholder GMR: B V N. Rao, Raaj Kumar and Ashis Basu.

This means that GMR, which owns about 33% of HEG will have three directors on the six-strong board.

However, the parties have also agreed to propose that a seventh, independent director be added to the board.

Valli Moosa will be nominated to fill this position.

HEG, which produces coal in South Africa, said that is will begin a search for a new president and CEO with expertise and experience in mining.

Coates will remain at the helm during the transitional phase, the firm said.

Earlier this year, Toronto-based Lawrence Asset Management requisitioned a meeting of HEG shareholders, with the aim of replacing the company's board of directors.

Lawrence said it wanted to put an end to any further attempt to acquire US miner Appolo Fuels and Diversified Energy, install a board of directors “more representative of the company's  shareholder base” and “to provide a path for the company to transition to new management more appropriate to execute on the next stage of the company's development”.

The asset-management firm said on Monday it supports the changes to the board, and has withdrawn its requisition.

HEG currently operates the Kendal mine, in the Mpumalanga province, where it plans to increase output to 180 000-t/m run-of-mine during 2010.

The company has also received a mining right for the larger Eloff project, which could achieve a 500 000 t/m run-of-mine rate.

HEG owns the Eloff asset in a joint venture with a black-economic empowerment partner.

In March, the firm terminated an agreement to buy Appolo Fuels, after struggling to come up with financing for the transaction.

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