Coal miner Wescoal has entered into sale agreements with Tokata Resources and Banjosign to dispose of its Intibane 1 and Intibane 2 collieries, in Mpumalanga.
The disposal will become effective on or about July 1.
The Intibane Complex comprises the Intibane 1 and Intibane 2 opencast collieries.
With the remaining coal reserve at the Intibane Complex being less than the annual production rate, the disposal is in line with Wescoal’s strategy of realising value for shareholders and building a scalable, sustainable business, the company said on Thursday.
The total consideration for the disposal is about R57-million in cash, which is payable by August 31.
The consideration, which will be used to reduce the short-term borrowings of the group and to fund strategic growth options, is to be settled through a R39-million payment by Tokata for the mining operations and assets of Intibane Complex, and a R18-million payment by Banjosign for the surface rights of the Intibane Complex.
The value of the net assets that are the subject of the disposal is R39-million, Wescoal said, and the profits attributable to the net assets that are the subject of the disposal, is R37-million for the year ended March 31.