South32 hand picks contender to acquire coal business
91% black-owned and controlled coal mining company Seriti Resources has entered into exclusive negotiations for the sale and acquisition of South32’s South Africa Energy Coal (SAEC) business following a comprehensive and competitive bid process.
As confirmed by South32, Seriti’s offer includes an up-front cash payment with a deferred payment mechanism whereby both companies will share in any commodity price upside for an agreed period.
The operational experience and sector expertise that Seriti would bring to these assets offers a strong base for the long-term sustainability of SAEC, to the benefit of all stakeholders.
Mike Teke, CEO of Seriti, comments:
“This is an exciting step forward for Seriti, and we look forward to continued engagement with South32 as we work together towards concluding a binding agreement. Should a sale agreement be reached, these assets would become a further important anchor of Seriti’s domestically focused coal business.”
“This would be a further significant investment in the South African mining sector by South African investors, backed by a proven track record of responsible operation.”
Through its operating subsidiary, Seriti Coal Pty Ltd, Seriti currently operates three large-scale, opencast and underground thermal coal mines, the New Vaal, New Denmark and Kriel mines, which it acquired from Anglo American, as well as various life extension coal resources and closed collieries.
Together with its partners, Seriti intends to develop its New Largo project into a large-scale, opencast coal mine capable of providing the base load fuel requirements for Kusile power station.
Seriti is co-owned by four anchor shareholders – Community Investment Holdings (CIH), Masimong, Zungu Investments (Zico) and Thebe. It is Seriti’s philosophy that 10% of its equity be ring-fenced equally for the benefit of employees and communities through employee and community trusts.