Coal news and updates

Gupta’s Tegeta buys Optimum Coal for $136m

Tegeta Exploration and Resources, a subsidiary of Oakbay Investments Group, has bought the assets of Optimum Holdings, which include Optimum Coal Mine, Optimum Coal Terminal and Koornfontein Mines for R2.15 billion ($137 million).

“Glencore, which has a 68% stake in Optimum, has agreed to settle the R400 million balance of the debt so that the deal can be implemented,” said the unit’s business rescue practitioners in a statement.

Glencore’s Optimum Coal unit went into ‘business rescue’ in August this year, citing an unprofitable deal to supply coal to South Africa’s power utility Eskom.

The sale will ensure that the operations of the mine continue and approximately 500 permanent jobs are protected. Tegeta has to take responsibility for the existing coal supply agreement with Eskom to supply coal to the power utility’s Hendrina Power Station, in Mpumalanga.

“We believe this transaction provides the most optimal outcome for stakeholders and importantly preserves the livelihoods of thousands of the mines employees and dependents as well as the uninterrupted coal supply to two of Eskom’s thirteen power stations,” said the business rescue practitioners.

According to the business rescue practitioners, the deal is subject to approval by the Department of Mineral Resources and the Competition Commission.

Established in 2006, Tegeta, which is owned by the controversial Gupta family, holds two mining rights for coal in the Delmas area and prospecting rights in Mpumalanga, Free State, KZN and Limpopo.

Koornfontein Mines was not in business rescue but has a contract with Eskom to supply coal to the Komati Power Station, which is expected to expire at the end of December this year.

Tegeta will take over responsibility for financing the operations of Optimum Mine with effect from January 1 2016.

source: http://www.mineweb.com