JOHANNESBURG (miningweekly.com) – The suspension by the JSE securities exchange of the listing of the troubled South African Coal Mining Holdings (SACMH) coal-mining company is a blow to controlling Royal Bafokeng Holdings shareholder.

SACMH’s largest single shareholder is Royal Bafokeng Capital, with shareholdings by Stanlib and the New Africa Mining Fund of roughly between 7% and 10%.

The cellphone message box of SACMH CEO CE Grant Scrutton, still in only his third month of office, was too full to take any more messages when Mining Weekly Online called to obtain his comment on the JSE’s decision. "This mainbox is full and cannot take any more messages at this time," his cellphone message box repeated from 9:00 on Monday morning to 15:00 on Monday afternoon. He was said to be locked in a board meeting.

The JSE said in a Stock Exchange News Service (Sens) notice that SACMH’s listing had been suspended “with immediate effect”, as a result of the company`s failure to comply with listings requirements.

SACMH, the Sens notice said, had not submitted a provisional report that had been stipulated in the listings requirements.

Royal Bafokeng Holdings is the business arm of the 300 000-strong Bafokeng community, which is located above valuable platinum deposits in North West province and built up most of its considerable wealth from its platinum-mining interests.

In attempts to diversify from an over-reliance on platinum, investments from mainly the Bafokeng commnity created SACMH in order to participate in the mining of energy coal for both export and domestic supply to Eskom.

Mining Weekly Online was unsuccessful in its attempts to obtain comment from Royal Bafokeng Holdings head Niall Carroll, but left a message with his office personnel.

When Scrutton spoke to Mining Weekly Online on March 30, after the value of the company’s shares had plunged more than 65% on the announcement that it would cease operating for three months and place its mines on care-and-maintenance, Scrutton said that SACMH was evaluating all options, of which one was delisting.

“We are giving ourselves an opportunity to restructure the business and to try to build a viable business model in the current market.

“Nothing is off the table. We are dealing with this as open-mindedly as we can with the assistance of our bankers,” he told Mining Weekly Online on March 30.

The three main contractors SACMH engaged at its operations employed about 120 people and SACMH employed only 18 permanent staff itself.

Only two to three members of staff were said to be required during the period of the mine’s care-and-maintenance and the cost of care-and-maintenance would be relatively small, Scrutton told Mining Weekly Online at the time.

The vast majority of SACMH coal sales, he said, had been into the export market. Although it has agreements to supply Eskom, those had not developed into full-blown supply contracts.

The company’s results were meant to be published on March 27, but were delayed.

Scrutton, a former KPMG chartered accountant, said that the company would remain on care-and maintenance until July at the latest.

Among the options for the business were closure and sale, in the face of the “difficult” market conditions and “significantly” reduced coal prices.

When the market collapsed, the major portion of the company’s debt-raising programme under former CE Karl Gribnitz was shelved.

Asked by Mining Weekly Online last month if the stage had been reached at which the company faced potential liquidation, he said: “Look, anything’s possible. What we have done now might find itself unpleasant for out major funders, so we are somewhat at their mercy, but we are in extensive negotiations with them.”

On March 16, SACMH warned of a decline in earnings a share for the year to December 31, as a consequence of R70-million in impairment losses. The junior coal-miner said at the time that it expected a headline loss of 8c a share for the year, compared with headline earnings of 3c a share the year before.

SACMH was listed on the JSE on August 20, 2007, following extensive negotiations to buy two operating mines, the Umlabu mine in Breyten, and the Ilanga mine in Middelburg.

SACMH’s Richards Bay Coal Terminal export allocation was increased from 17 250 t/m to 58 850 t/m, with the company intending to sell 40 000 t/m to Eskom and 60 000 t/m to export from mid-2009.

A capital-investment programme under way embraced the commissioning last year of a new rail siding at Umlabu, and a plan to increase run-of-mine production capacity to 150 000 t/m and process plant capacity to 110 000 t/m.

SACMH raised R100-million through the issue of 25-million new shares and debt and intended raising further equity and debt before the market downturn resulted in those plans being shelved.

The modern new rail siding, commissioned in October, was designed to speed up coal loading to match the new ton-per-hour train tariffs that State-owned rail enterprise, Transnet Freight Rail, had introduced.

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