Africa Coal Partners, a special purpose vehicle set up and managed by global investment holding company Duet Group, will acquire South Africa-focused coal miner Ichor Coal's 45.18% stake in Mbuyelo Coal for €95-million.
Mbuyelo Coal operates three openpit mines that produce between 7.2-million and 8-million tons a year of thermal coal for supply to State-owned power utility Eskom.
"We are very excited by the opportunities offered by the coal industry in South Africa. South Africa is not yet in a position to switch completely to green energy, hence coal will remain a key component of South Africa's energy portfolio for the foreseeable future. Reliable power production remains at the heart of Africa's industrialisation and its ability to lift its citizens out of poverty.
"We believe that new technologies can be deployed to make the coal industry more environmentally sustainable, while offering a credible solution to the challenges of generating power in South Africa. We also believe it's an opportunistic time to invest in South Africa," says Duet Group CEO Henry Gabay.
Ichor CEO Nonkululeko Nyembezi-Heita says the company has been reviewing strategic options for some time and that the opportunity offered by Duet meets its goals in a challenging environment with a partner that is willing to significantly contribute to Mbuyelo's growth and profitability.
The transaction is expected to close in the first quarter of 2020.