Gundo Madima

Publication: Mining Weekly.
Author: Chanel De Bruyn.

JOHANNESBURG (miningweekly.com) – South Africa has to start accelerating its drive towards a responsible transition to clean coal power generation technology to grow the country’s gross domestic product, economy and drive job creation, says empowered coal miner Seriti Resources CEO Mike Teke.

In delivering the keynote opening address for the Coal Industry Day’s first-ever online edition on August 20, he urged government, the private sector and all key role-players “to come to the party” in accelerating the retrofitting of most of South Africa’s coal-fired power stations, especially those marked for closure.

Despite capital being scarce in a country that is faced with numerous economic and societal challenges, Teke advocates for a responsible transition towards integrating the use of carbon capture and storage in clean coal power generation.

He highlighted the importance of understanding how other countries, like Japan, were achieving higher efficiencies and lower carbon emission rates with their coal-fired power stations.

“We need to proactively work together as the energy system of the world changes or transitions, [and] we need to look aggressively into this carbon capture [use] and storage,” Teke told delegates, noting that organisations like the World Coal Association and the International Energy Agency are either already supporting the transition, or considering it.

However, he said it was important to acknowledge that coal would continue to play an important role and be considered a national resource – not only for South Africa, but for the Southern African Development Community and the African continent at large.

“With South Africa having an abundance of coal, it has exploited the resource [and] we need to use it to benefit our society and create jobs,” he averred, emphasising his belief that South Africa “should play an important role as a backbone” for driving this transition, owing to its abundance of the natural resource and coal-based infrastructure.

Seriti Coal wishes to make the announcement of the recent following appointments:

• Mr Kevin Steyn has taken over the role of Chief Operations Officer,
• Mr Mike Lawson transferred from Kriel Colliery to New Denmark Colliery as General Manager,
• Mr. Tiro Tamenti appointed as the General Manager at New Vaal Colliery,
• Mr Raymond Makgota appointed as a General Manager at Kriel Colliery,
• Mr Gavin Silver has taken the role of Mining Excellence at the Shared Services Centre.

Kevin Steyn

Chief Operations Officer

Raymond Makgota

General Manager at Kriel Colliery

Tiro Tamenti

General Manager at New Vaal Colliery

Mike Lawson

General Manager at New Denmark Colliery

We live in unprecedented times – the global Covid-19 pandemic has impacted the entire world and changed the lives of millions of people. It is during these times of crises that business needs to step up and make a positive contribution.

Seriti recognised that a pro-active management of the pandemic in collaboration with peers and government is critical; particularly towards supporting the already economically inactive host communities who have been badly affected by the pandemic.

Our response has been designed to reflect our support with regard to the health and safety of our employees and contractors; and we have prioritised the donations of food parcels to elderly people residing in our host communities. This initiative to help the most vulnerable community members commenced few days prior to the President’s announcement of the nation’s lockdown in March, with 231 elders being helped.

From Standerton Hospital and the Emalahleni Local Municipality, to Oranjeville and Viljoensdrift, our Covid-19 related community outreach programmes includes the supply of personal protective equipment (PPE) such as safety masks, aprons, gowns medical waste bags, face shields, and medical shoes, Covid-19 education and awareness materials, sanitisers and food hampers packed with essential groceries for the elderly, the disabled, child-headed homes and other needy community members.

We are committed to continuing our operations to support our host communities and government throughout the pandemic, and live up to our motto of ‘Seriti cares’.

“Keeping the lights on”

Johannesburg, 1 April 2020: Seriti Coal advises that its three mines, New Vaal Colliery, New Denmark Colliery and Kriel Colliery, are continuing to operate during the lock-down period to ensure that the three power stations they service continue to deliver power to the national grid. These mines deliver approximately 24Mtpa of thermal coal to Eskom’s Lethabo, Tutuka and Kriel power stations, which collectively generate about 23% of the country’s electricity. Of the 6,000 employees working at these mines, around 3,800 people will continue working during this period. Where at all possible, employees are working remotely.

CEO Mike Teke says: “Seriti Coal has plans in place to manage the risks associated with this pandemic and takes very seriously our responsibility to our employees. Together, with our employees, organised labour and the support of the Department of Minerals Resources and Energy, we are making every effort to ensure that our employees are informed about how to prevent infection, to respond rapidly and responsibly in the event that they become ill, and how to protect themselves, their families and fellow workers in this trying time. At the same time, we are very proud to be able to contribute to the national interest of keeping the lights on, and we salute our employees and union partners that make this happen”.

Seriti’s coronavirus preparedness plan focuses on the following measures:

• Educating and informing: promoting hand and respiratory hygiene amongst employees; providing facemasks to those who show respiratory symptoms of influenza; practising social/physical distancing by keeping adequate staff ratios; providing masks to those who use pool travel arrangements; using proper signage and communicating with staff and visitors at health centres; and observing cleaning and disinfection procedures.
• Early identification and rapid response: identifying and isolating suspected cases early on, including those who have travelled recently or have had contact with people diagnosed with the virus. Thermal scanners will be used at all shifts to scan all employees and contractors coming to work.
• Minimising risk of transmission at work: providing adequate and appropriate PPE (gloves, masks, hand sanitisers, goggles and disposable aprons) to employees at risk. Non-essential services employees are working from home as part of a flexible work arrangement during the pandemic.
• Health care worker safety: Healthcare personnel and first responders have been trained to adhere to standard, contact, and airborne precautions, including the use of eye protection (goggles or a face shield).
• Pandemic supply chain co-ordination: We anticipate shortages of essential goods amid panic buying and reduced supplies, and possible interruption of essential services. We are reviewing our PPE inventory, supply chain and utilisation rate to ensure that Seriti Coal has access to crucial supplies.
• Travel restrictions: limiting non-essential travel to affected areas and maintaining a risk register of persons who have travelled.
• Integrated incident management team: we have established an integrated incident management team for a concerted coordinated response to define priorities and time frames. The team maintain situational awareness, provide incident summary, incidents debriefing and flag incidences with potential lasting implications.
• Business Impact Analysis (monitoring and analysis): identifying, quantifying and qualifying the business impact of a loss, interruption or disruption of business processes and providing the data from which appropriate continuity strategies can be determined.
• Technical expertise and guidance: NICD (National Institute of Communicable Disease) provides basis for technical guidance in surveillance, diagnosis and response guideline to the pandemic.
• Communication and reporting: establishing systems for sharing information with key partners and stakeholders.

Queries:

Charmane Russell                              +27 82 372 5816 or charmane@rasco.za

Alan Fine                                             +27 83 250 0757 or alan@rasc.co.za

Notes to editors:

About Seriti:

Seriti Coal is a broad-based, 91% black-owned and controlled coal mining company. Seriti, through its operating subsidiary, Seriti Coal Pty Ltd, currently operates three large-scale, opencast and underground thermal coal mines, the New Vaal, New Denmark and Kriel Colliery’s, which it acquired from Anglo American, as well as various life extension coal resources and closed collieries. Together with its partners, Seriti Coal 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 – Masimong Group Holdings (Masimong), Community Investment Holdings (CIH), Zungu Investments (Zico) and Thebe Investment Corporation (Thebe). It is Seriti’s philosophy that 10% of the equity in its mining operations be ring-fenced equally for the benefit of employees and communities through established unencumbered employee and community trusts.

As a responsible South African coal miner, Seriti has a proven track record in the acquisition, operation and development of large-scale opencast and underground coal mines. Guided by experienced board and management teams, Seriti maintains a principle focus on its long-term commitment to the domestic market and, in particular, the reliable and cost effective provision of coal to Eskom.

Publication: Mining Weekly.
Author: Kim Cloete.

CAPE TOWN (miningweekly.com) – South African coal producers will need to boost efficiency as competition intensifies in coal export markets, says Mike Teke, CEO of black-owned and controlled coal mining company, Seriti Resources.

As many Western countries shift their focus towards renewable and alternative energies, countries such as the US, Australia and Colombia are upping their game for a slice of the coal pie in the East, particularly China and India.

“Competition is continuing to intensify in the export markets and that means for us in South Africa we need to ensure we stay competitive and efficient in our exports. The global energy transition is affecting us as a country and as a producer,” Teke told the Southern African Coal Conference in Cape Town.

Coal exports from the Richards Bay Coal Terminal totalled 72-million tonnes in 2019, down from 73.5-million tonnes in 2018, and 76.5-million in 2017. The largest share of South Africa’s coal exports went to India in 2019. Teke said coal is forecast to continue playing a key role in most Third World countries.

Teke said there was room to improve efficiency with Transnet, while coal producers also need to embrace new technology.

“We can’t control exchange rates. The things we can control are productivity and technology. We need to be better than the best.”

He said the US was upping its game in exporting coal. The US Presidential elections this year could also spark a major change in policy if it resulted in a win for the Democrats.

“If the Democrats win, the challenge is they will shut coal-fired power plants, but their mines will continue to operate, and they will compete with us in exporting to the East.”

Former New York mayor, Michael Bloomberg, who is running for President, has said that if he wins the Presidency, he would block new natural gas and get rid of coal in a bid to stem emissions and halt more climate change.

“We know the US is going to compete to push coal into markets. Columbia is also there. A number of countries which are retiring their coal-fired plants will continue to mine and export,” said Teke.

Teke called for strong collaboration between different governments in dealing with the coal sector.

“Collaboration, and I mean strong collaboration, among different government departments and the private sector is now urgent to ensure that the transition is delivered successfully.”

Teke appealed for support for embattled Eskom.

“Now is the time. We have new leadership at Eskom. What option do we have if we don’t help Eskom? We need to have all hands on deck from everyone in this country. We are reaching a stage where we can’t just laugh and criticize and do nothing. This is about national interest and our national duty.”

Last November, Seriti Resources concluded an acquisition agreement with South32 to acquire South32’s 91.385% shareholdling in South Africa Energy Coal (SAEC). The deal includes four collieries in Mpumalanga – Khutala Colliery, Klipspruit Colliery, Middelburg Colliery and Wolverans Colliery, as well as three processing plants.

Publication: Mining Review Africa.
Author: Laura Cornish.

Coal mining magnet MIKE TEKE, the CEO of Seriti Resources, is in the process of establishing a coal power house in the country – driven by the need to contribute towards a prosperous energy future and fulfil its objective of help bring dignity back to South Africa’s citizens, writes LAURA CORNISH.

Seriti Resources could be described to a large extent as the Sibanye-Stillwater of the South African coal sector.

Like its precious metals peer, which has spent the last few years acquiring mature assets from the country’s gold and platinum majors, and rebuilding their potential, the company has followed a similar path – acquiring mature coal assets from the country’s coal majors to ensure they offer long-term production and energy generation sustainability.

This article first appeared in Mining Review Africa Issue 1, 2020 Read the full digimag here or subscribe to receive a print copy here

Teke is also the perfect candidate to achieve this. He has been in the South African coal game for decades, having built a solid career in the sector at BHP Billiton and thereafter achieving considerable success and shareholder value at Optimum Coal.

Today, Teke is building upon the legacy which he started at Optimum but is only now truly in the throes of doing. Perhaps it was fortuitous that Anglo American was looking to sell its domestic Eskom-tied assets because it gave Teke the impetus to establish Seriti Resources in partnership with three other leading black-owned businesses, to acquire the Anglo assets and in so doing ensure the sustainability of a cornerstone economic contributor to South Africa.

“I still believe in the value of coal, particularly in developing countries like South Africa that still depend on this commodity for the majority of its power generation,” Teke states, sharing his view on wanting to build a business in an era where global markets are shifting their power strategies away from ‘dirty coal’ and more towards cleaner, renewable energy.

“The world’s drive to reduce its carbon footprint and clean up the environment is an absolute necessity but we cannot eliminate our dependence on coal overnight.

Even first world countries such as Germany have a long-term coal exit strategy that will reduce its reliance on coal for power generation in 2038. South Africa requires a similar energy journey. For now, we simply cannot walk away from 15 coal-fired power stations,” Teke continues. “

Anglo assets just the first step

Through his own company Masimong Group Holdings, Teke and his close working partner and colleague Doug Gain (now the CFO of Seriti Resources), joined forces with Community Investment Holdings, Thebe Investment Corporation and Zungu Investments Company, and successfully concluded the acquisition of Anglo American’s three Eskom-tied coal mines Kriel, New Denmark and New Vaal for R2.3 billion in March 2018.

“A consortium of strong black majors made sense, not only from an ownership perspective but also because our balance sheet ensured our ability to continue operating the mines and feeding their respective power stations – Kriel, Tutuka and Lethabo,” Teke points out.

Now, three years later the company is continuously delivering on its commitments – driven in essence by the meaning of its name. Seriti in Zulu means giving dignity and respect and this lies at the heart of Teke’s focus as the CEO of Seriti Resources.

“Building a business that has and promotes dignity is something the country can be proud of and something its citizens can depend on,” he highlights.

Taking over three large-scale coal mines, which have a combined coal production of 25 Mtpa, was no easy feat. Anglo is a respected and best-in-class company with a reputation to support that.

“We needed our newly acquired personnel to believe that we would uphold the value and respect they associated with Anglo while at the same time putting our own fingerprint on the assets,” Teke reveals.

And the company has done just that – maintaining the production momentum from its three cost plus mines required to feed their associated power stations while implementing its own philosophy of “doing things simply”.

Teke’s strategy to run Seriti Resources using a simple operating model of best safety, maximum tonnage and smart cost management has served the company well thus far.

The business is further built on two more arms of strength which the CEO describes as intensity: driving and maintaining the numbers committed to and consistency: treating each and every Seriti employee equally and fairly.

The Anglo deal also saw Seriti Resources acquire a 45% stake in the eMalahleni-based Greenfields coal project New Largo whose potential was never realised under Anglo but will soon be a significant contributor to its new owner, who shares the asset with Coalzar (22.5%), the Industrial Development Corporation (22.5%) and New Largo Coal Employee and New Largo Coal Community Trusts (5% each).

“New Largo has the capacity to produce between 10 and 12 Mtpa of coal which it will deliver to the adjacent new Eskom-owned Kusile power station.

“Our plan is not to sit on our laurels but complete a feasibility study on the asset and potentially move it into production in 2020,” Teke outlines, adding that he is confident of securing the necessary funds it will need to do so.

Acquiring South32’s coal assets

The acquisition of South32’s South African coal assets follows a similar storyboard to Anglo’s.

“The company announced its intention to sell its South African coal assets – both Eskom and export mines – and we liked the opportunity this offered and their ability to move us quickly along our dignity journey,” Teke shares.

The deal, which was concluded in November 2019, sees Seriti Resources acquire the South32’s 91.835% shareholding in South Africa Energy Coal (SAEC), subject to certain conditions.

Included on the Seriti side of the transaction are two trusts which will acquire equity on behalf of employees and communities. The remaining 8.165% interest in SAEC is held by a black economic empowerment consortium led by the Phembani Group.

The purchase price includes an up-front cash payment of approximately R100 million. In addition, South32 will receive 49% of the free cash flow generated by SAEC from the date the transaction is concluded until March 2024. That component will be limited to a maximum of R1.5 billion a year.

Once completed, Seriti Resources will increase its annual coal production to 50 Mt (excluding New Largo) and its personnel headcount from around 6 000 at present to about 15 000.

“The combination of our assets will create a formidable business in this country – well into the future. I can further say with confidence that Eskom has, and will, continue to work well with Seriti: a strong black-owned company with a strong balance sheet.”

Upon conclusion of the acquisition and the necessary regulatory permissions, which should be wrapped up before the end of 2020, Seriti Resources wants its employees to know two things:

1. The company will not lose sight of its original assets and will continue to focus on ensuring they remain an important part of the company’s mine portfolio, and
2. The company’s leadership team will be visible and on the ground at all of its mines – more critical than running the business entirely from a remote head office. “This business is about quick decision making and has no need for a big brother,” Teke notes.

Importantly, Teke highlights that although its asset base comprises mature mines, they all still offer +25 year lifespans. The South32 assets in particular still have significant optimisation opportunities Teke indicates.

“With a strong asset base and an unwavering drive to maintain the success it has achieved to date; I am excited about the company’s future. I am absolutely committed to this business and want to leave a lasting legacy that the country will recognise with respect and dignity,” Teke concludes.

Publication: Mining Review Africa.
Author: Guest Contributor.

Black-owned and controlled coal mining company Seriti Resources has concluded an acquisition agreement with South32 to acquire South 32’s 91.835% shareholding in South Africa Energy Coal.

Located in the coalfields of Mpumalanga, SAEC includes four collieries – Khutala Colliery, Klipspruit Colliery, Middelburg Colliery and the Wolvekrans Colliery – as well as three processing plants, producing energy coal for the domestic and export market.

Included on the Seriti Resources side of the transaction are two trusts which will acquire equity on behalf of employees and communities. The remaining 8.165% interest in South Africa Energy Coal (SAEC) is held by a black economic empowerment consortium led by the Phembani Group.

The purchase price includes an up-front cash payment of approximately R100 million. In addition, South32 will receive 49% of the free cash flow generated by SAEC from the date the transaction is concluded until March 2024. That component will be limited to a maximum of R1.5 billion a year.

Fulfilment of the transaction is subject to the following conditions being met:

• Approval from South African and certain foreign competition authorities;
• Approval from the Minister of Mineral Resources and Energy (DMRE) in terms of Section 11 of the Mineral and Petroleum Resources Development Act;
• Approval from Richards Bay Coal Terminal;
• Consent from Eskom for the change of control of SAEC and agreement in relation to the Duvha Coal Supply Agreement between Eskom and SAEC; and
• Confirmation from the DMRE that it will accept the substitution of rehabilitation guarantees provided by South32 with rehabilitation guarantees provided by Seriti.

Subject to the conditions being satisfied, the transaction would be expected to close in nine to twelve months.

“Finalisation of this transaction will be a significant milestone for Seriti in our ambition to become a black-owned and controlled mining champion,” says Seriti Resources CEO Mike Teke.

“The SAEC acquisition will enable us to offer further secured, long-term coal supply solutions to Eskom as a demonstrable commitment to sustainably supporting South Africa’s energy needs. The combination of our energy coal businesses will realise further operational and technical efficiencies enabling us to better service our customers by offering competitive energy solutions.

“We remain fully committed to all our stakeholders and we welcome the participation of the SAEC employees and communities in this acquisition.”

South32 CEO Graham Kerr said: “We ran an exhaustive and competitive process and we believe Seriti Resources as an established operator is ideally positioned to unlock the potential of SAEC’s existing domestic and export operations, including its significant untapped resource base.

“The sale of our interest in SAEC will enable the business to continue to operate safely and sustainably into the future for the benefit of its employees, customers and local communities, consistent with South Africa’s transformation agenda.”

Seriti Resources, through its operating subsidiary, Seriti Coal, 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.

Publication: Miningmx.
Author: David McKay.

SOUTH32 today concluded a binding agreement with black-controlled mining firm, Seriti Resources for the sale of its 91.8% stake in South African Energy Coal (SAEC), a business unit of the Perth- and Johannesburg-listed group that produces about 28 million tons a year (Mt/y) of coal, of which about half is to Eskom.

South32 will be paid R100m by Seriti Resources and receive 49% of free cash flow generated by the mines for a five-year period until March 2024 capped to a maximum of R1.5bn annually.

Phembani Group, a black-owned diversified industrial company, will retain its 8.12% stake in SAEC.

The purchase will be concluded with Seriti subsidiary Thabong Coal and two trusts representing employees and mine communities each holding a 5% stake in SAEC respectively – in line with the latest guidelines as set down in Mining Charter III.

Read story …

Publication: Business Live.
Author: Lisa Steyn and Karl Gernetzky.

Seriti Resources poised to become SA’s second-largest coal producer after Exxaro

A deal that could create the second-largest coal producer in SA now hinges on the renegotiation of a loss-making Eskom contract.

South32, an Australia-listed miner which was spun out of BHP in 2015, announced on Wednesday it had concluded a purchase agreement with Seriti Resources for its SA Energy Coal business for an upfront payment of R100m.

6 November 2019, Johannesburg: Seriti Resources is pleased to announce that the company and South32 have concluded an acquisition agreement in terms of which Seriti will acquire the latter’s 91.835% shareholding in South Africa Energy Coal (SAEC), subject to certain conditions detailed below.

Included on the Seriti side of the transaction are two trusts which will acquire equity on behalf of employees and communities. The remaining 8.165% interest in SAEC is held by a black economic empowerment consortium led by the Phembani Group.

The purchase price includes an up-front cash payment of approximately R100 million. In addition, South32 will receive 49% of the free cash flow generated by SAEC from the date the transaction is concluded until March 2024. That component will be limited to a maximum of R1.5 billion a year.

Fulfilment of the transaction is subject to the following conditions being met:

• Approval from South African and certain foreign competition authorities;
• Approval from the Minister of Minerals and Energy (DMRE) in terms of Section 11 of the Mineral and Petroleum Resources Development Act;
• Approval from Richards Bay Coal Terminal;
• Consent from Eskom for the change of control of SAEC and agreement in relation to the Duvha Coal Supply Agreement between Eskom and SAEC; and
• Confirmation from the DMRE that it will accept the substitution of rehabilitation guarantees provided by South32 with rehabilitation guarantees provided by Seriti.

Subject to the conditions being satisfied, the transaction would be expected to close in nine to twelve months.

Seriti CEO Mike Teke said: “Finalisation of this transaction will be a significant milestone for Seriti in our ambition to become a black-owned and controlled mining champion.

“The South Africa Energy Coal acquisition will enable us to offer further secured, long-term coal supply solutions to Eskom as a demonstrable commitment to sustainably supporting South Africa’s energy needs. The combination of our energy coal businesses will realise further operational and technical efficiencies enabling us to better service our customers by offering competitive energy solutions.

“We remain fully committed to all our stakeholders and we welcome the participation of the SAEC employees and communities in this acquisition.”

South32 CEO Graham Kerr said: “We ran an exhaustive and competitive process and we believe Seriti as an established operator is ideally positioned to unlock the potential of SAEC’s existing domestic and export operations, including its significant untapped resource base.

“The sale of our interest in SAEC will enable the business to continue to operate safely and sustainably into the future for the benefit of its employees, customers and local communities, consistent with South Africa’s transformation agenda.”

Queries:

Charmane Russell                              +27 11 880 3924 or +27 82 372 5816

Alan Fine                                             +27 11 880 3924 or +27 83 250 0757

MEDIA BRIEFING:

You are invited to attend a joint media briefing to discuss the Seriti and South32 transaction, to be hosted by Mike Fraser and Mike Teke.

Date:      6 November 2019

Time:     09:30

Venue:   South32, 39 Melrose Blvd, Melrose Arch

Notes to editors:

About Seriti:

Seriti is a broad-based, 91% black-owned and controlled coal mining company. Seriti, through its operating subsidiary, Seriti Coal Pty Ltd, 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 – Masimong Group Holdings (Masimong), Community Investment Holdings (CIH), Zungu Investments (Zico) and Thebe Investment Corporation (Thebe). It is Seriti’s philosophy that 10% of the equity in its mining operations be ring-fenced equally for the benefit of employees and communities through established unencumbered employee and community trusts.

As a responsible South African coal miner, Seriti has a proven track record in the acquisition, operation and development of large-scale opencast and underground coal mines. Guided by experienced board and management teams, Seriti maintains a principle focus on its long-term commitment to the domestic market and, in particular, the reliable and cost effective provision of coal to Eskom.