South32 intends to manage South Africa Energy Coal (SAEC) as a stand-alone business, as of April 2018, and invest 4.3 billion South African Rand (approximately US$301 million) to extend the life of its Klipspruit coal mine by approximately 20 years.
SAEC require ongoing investment to sustain production and meet its take or pay rail and domestic supply obligations. To sustainably improve its financial performance, South32 will restructure SAEC and manage it separately from the rest of the group with tailored functional support, systems and governance processes. This change will also allow the group to further simplify the way it manages its global portfolio.
Graham Kerr, South32 CEO, said: “Establishing South Africa Energy Coal as a stand-alone business will enable us to improve the operation’s competitiveness and ensure its ongoing sustainability. This process will also allow us to further simplify our organisation and unlock additional value for shareholders.”
Once SAEC has been established as a stand-alone business, South32 intends to commence a process to broaden ownership of SAEC. According to the company, this will present opportunities for Broad-Based Black Economic Empowerment entities, employees and communities, and could lead to a listing of SAEC on the Johannesburg Stock Exchange.
“We will also seek to increase the local ownership of South Africa Energy Coal, consistent with our commitment to South Africa’s economic transformation, and may ultimately list the business on the Johannesburg Stock Exchange,” Kerr added.
Read the article online at: https://www.worldcoal.com/coal/27112017/south-africa-energy-coal-to-become-independent-business/