JOHANNESBURG – Seriti Resources, a South African mining company, won a bid to acquire South32's thermal-coal assets in the country, according to two people familiar with the process.
Final offers were in a range of $300-million to $350-million, according to one of the people, who asked not to be identified because the information isn’t public.
South32 started a search last year for buyers of its South Africa Energy Coal unit, the country’s third-biggest exporter of the fuel. Seriti, led by Mike Teke, the ex-chairman of the Richards Bay Coal Terminal, was the top bidder in the process, the people said.
When the sale is completed, the assets will add to coal mines Seriti bought from Anglo American Plc and increase its ranking as one of the largest miners of the fuel in South Africa. Teke is showing progress in his plans to build a massive black-owned mining company as Anglo and South32 have taken steps to divest from some thermal-coal operations in South Africa.
Teke declined to comment on the bid process, a spokeswoman for Seriti said by email. South32 didn’t immediately respond to emails seeking comment. The transaction is still subject to approval from regulatory authorities.
The price of coal at South Africa’s port of Richards Bay, where the fuel is exported, has dropped 38% this year.
South32’s energy coal unit includes four coal-mining operations and three processing plants that supply domestic and export markets, according to the company’s website. Wescoal Holdings and Canyon Coal with partner Mercuria Energy Group were also bidding in June, people familiar with the process said at the time.