South Africa’s sixth-largest coal producer and fourth-largest coal exporter, Optimum Coal, is determined to get bigger.

“We’re acquisitive. We’re looking for assets,” company CEO Mike Teke told Mining Weekly Online on Thursday. “Last week we announced the acquisition of an exploration right, Remhoogte. This is the second exploration right we have acquired. We want to grow. Growth is essential to Optimum.”

The company is focused on becoming a “pure thermal coal player” and sold its minority stakes in Afarak Platinum for R121-million. This is a strategic decision, based on the fact that the company is well established in the thermal coal sector in the Witbank area.

“Coking coal is attractive and, yes, there are opportunities,” he stated. “If a coking coal opportunity comes along, we’ll look at it.”

As South Africa is not famous as a coking coal producer, this issue is related to the question of whether or not the company is considering expanding beyond South Africa. “Our interest is to consolidate our position in South Africa. We have had approaches from Zimbabwe, Mozambique and elsewhere in Africa with possible opportunities,” reported Teke. “But nothing active has happened on our side.”

Being a 60% black-owned company gives Optimum the black economic -empowerment status to act as a consolidator in the South African coal business.

The company had a dispute with national electricity utility Eskom, over the supply of coal to the Hendrina power station, which has since been resolved.

“I think our relationship with Eskom before the dispute was a good relationship. We talked to them, we supplied them,” affirmed Teke, “I think the relationship has become better. The dispute highlighted the need of both companies to work more closely together, to identify disagreements early and resolve them early. There are opportunities for both us and Eskom – for example, to supply the Komati power station from the Koornfontein mines, and to supply Eskom from our future projects.”

Optimum revealed its reviewed provisional group financial results for the year ended June 30, 2011. These included a 57% increase in revenue to nearly R5.3-billion, a profit of R460-million, a net debt of R77-million and cash in hand of R567-million.

Run-of-mine coal production rose by 21% to 17.1-million tons while saleable coal output went up by 26% to 13.6-million tons and export coal production increased by 28% to 6.8-million tons.

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