Koornfontein mine, one of two former Gupta-owned mines put under business rescue, has finally been sold to the Makole Group’s Black Royalty Minerals (BRM) after the initial successful bidder, Lurco, failed to come up with the funds in time.
According to Bouwer van Niekerk, lawyer for the business rescue practitioners, BRM became the automatic choice after Lurco failed to come up with the R500 million required.
Lurco had been awarded the bid and was given seven days on November 25 to raise the funds.
Van Niekerk said BRM bagged the mine after a lengthy competitive bidding process and a vote by creditors a fortnight ago.
The mine’s assets include an open pit strip mine, two underground sites – Gloria and Blinkpan – a processing plant capable of processing 3.5 million tonnes a year, a railway siding with rapid loading and a 1.5 million metric tonnes a year port allocation at the Richards Bay Coal Terminal.
Operations at the mine can extend well beyond 2040.
The final three shortlisted companies were Lurco Group, BRM and Orchid Mining-Smada.
“Lurco failed to come up with the money by the agreed date so it went to the second option which is BRM,” Van Niekerk said.
Ndavhe Mareda, Makole Group chief executive, said BRM’s bid included a multiple funding approach, comprising of offtake agreements, internal funding and facilities by a major local bank.
Mareda added that there were still some conditions BRM still has to fulfil by Friday November 1.
BRM currently owns and operates the Chilwavhusiku Colliery in Bronkhorstspruit and Mareda said the acquisition of Koornfontein is part of the group’s expansion strategy.
“From the time BRM started operations at the Chilwavhusiku Colliery in January 2018, we have strategically focussed on expanding our operational footprint. The bid for Koornfontein coal mine is aligned with our existing focus and expansion strategy which combines local operations with a strong export component,” he said.
Mareda anticipates that operations at the Koornfontein mine will re-commence in the first quarter of 2020.
The remaining formerly Gupta-owned mine, Optimum is still up for grabs and according to Louis Klopper, a business rescue practitioner who is part of the team selling off both assets, the process should be wrapped up before the end of this year.
“When the rescue plan is published, the meeting of creditors will be held within 10 days and they will vote on their preferred bidder,” Klopper said.
Lurco and the state-owned African Exploration Mining and Finance Corporation have joined forces to bid for Optimum.
Meanwhile, Aubrey Chauke, chief operating officer and co-founder of Lurco, has told City Press that the company did not fail to raise the money but simply failed to bring it into the country by the specified date since its funders are overseas based.
He also said the deadline imposed on the company was irrational and unreasonable.