It will be interesting to see if business rescue succeeds at Optimum Coal, which last week had to deal with the twin issues of mining-licence suspension as well as potential penalty claims from State electricity utility Eskom. Read on page 8 of this edition of Mining Weekly of joint business rescue practitioners Peter van der Steen and Piers Marsden taking over the job of keeping Optimum out of potential liquidation. Glencore stated in a media release that its Optimum subsidiary has been supplying coal to the State power utility at a price well below the cost of production for some time but with real harsh reality arising when Eskom served notice of its intention to asserts its rights to claim significant historical specification penalties from Optimum and impose future penalties. This proved a bridge too far for Optimum directors, who calculated that the imposition of historic and future penalties for not meeting specifications would mean that Optmum would be receiving the R1 for every ton of coal it sold to Eskom until the end of its contract in 2018. This contract, to supply 5.5-million tons a year to Eskom, was signed as long ago as 1993, when Optimum was still a coal company in the BHP Billiton fold. Fingers are now being crossed that the busines rescuers will be able to negotiate “this huge challenge” to preserve the remaining jobs and keep the business, ehiuch supplies coal to Hendrina power station, out of the hands of liquidators.
Johannesburg-domiciled AngloGold Ashanti CEO Srinivasan (Venkat) Venkatakrishnan appears to have struck a good deal in his sale of the Cripple Creek & Victor gold mine, in Colorado, to the New York-listed-listed Newmont Mining Corporation. AngloGold gets $820-million in cash and also retains a net smelter return royalty. Read on page 18 of this edition of Mining Weekly of the sale of the US mine being part of a 24-month blitz by AngloGold to lop two-thirds off overhead expenditure as it brings in low-cost ounces from the Kibali mine in the Democratic Republic of Congo and Tropicana in Australia. AngloGold Ashanti has been prioritising self-help steps to cut its debt by $1-billion through asset sales and partnerships. Last year it also sold Navachab gold mine in Namibia to QKR Corporation with a net smelter return tie that it described as a form of royalty to be paid quarterly for seven years following the second anniversary of the closing date. The transactions are all part of a strategy to strip out capital, exploration, corporate and operational costs and striving for value when disposing of assets seen as non-core.
Pallinghurst platinum company Sedibelo Platinum Mines is managing to maintain very cordial relations with its near-mine communities, which was exemplified at an event last month at which the North West province’s Bakgatla-Ba-Kgafela community and Sedibelo highlighted the strengthening of its seven-year partnership. Read on page 36 of this edition of Mining Weekly of the partnership identifying a number of large-scale initiatives in the area, including water, housing, sewerage and road projects. Platinum mining is an economic pillar economic for the community, along with tourism, manufacturing and agricultural development, which has driven programmes in health, education and skills development. Moruleng, a rural area on the north-eastern border of the Pilanesberg, hosts 350 000 people in 32 villages.