Following Sibanye Gold’s search for alternative sources of a long-term constant energy supply, the company has signed a term sheet with the Waterberg Coal Group (WCG) to meet the company’s electricity supply targets by WCG providing a sizable coal resource base.
Neal Froneman, CEO of Sibanye commented: “We have been investigating various energy alternatives for some time now and the WCP has the potential to be a medium to long-term sustainable power solution for Sibanye. The multi-product nature of the WCP provides the ability to produce energy from coal that would otherwise have been thought of as discard, in an economically viable manner. This will facilitate Sibanye securing a reliable energy supply, while simultaneously having a greater control over energy costs. Ultimately, the security of supply and enhanced cost control will continue to support our bottom line and hence our ability to pay industry leading dividends.”
The terms and conditions of the agreement include Sibanye investing AUS$8.5 million of working capital to facilitate WCG to further progress its Waterberg coal project. Additionally the company would acquire a secured convertible note in WCC from a consortium of lenders (The Standard Bank of South Africa Ltd and Abu Dhabi Investment Council for AUS$22.5 million.
The transaction is subject to certain conditions being met, such as completing a detailed due diligence, entering into the transaction documents – including revised facility terms and coal off-take agreement for a Sibanye dedicated independent power producer platform.
Edited from press release by Harleigh Hobbs
Read the article online at: https://www.worldcoal.com/coal/17092015/sibanye-gold-invests-in-waterberg-coal-group-2867/