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A 600-hectare farm 10km outside Delmas in Mpumalanga is alive with heavy machinery and workers.
Tractors, loaders, backhoes, drillers, long-haul trucks and a workforce of about 300 people are extracting coal to fuel power stations in the electricity-generating hub of Mpumalanga’s highveld region.
Nearby, new tar roads are being built for access to the mine’s various operation centres.
A few months ago, it seemed like a pipe dream that a black-owned company could run such a huge mining operation, but Mbuyelo Coal is doing just that after a R210 million cash injection from the Industrial Development Corporation (IDC).
Many commercial banks turned down Mbuyelo Coal’s applications for a loan to start Manungu Colliery – which was understandable, says its 33-year-old chief financial officer, Kervin Mthombeni, because the industry has been so high risk.
Not only have there been tensions between unions and owners, the financial situation at Eskom means that investors are reluctant to provide such a large loan to an emerging company with the power utility as its major client – even with a 15-year contract.
“For a black-owned company that has no funds, it just could not be easy,” says Mthombeni.
“We’ve been trying to raise funds since 2005, when the company started. We would get some money, but it would run out before we had made any meaningful progress. Unfortunately, until you start producing, that’s what any emerging business has to juggle … get funds, use them and, when exhausted, start raising them again. The commercial banks were reluctant to invest.”
The funding struggle began after the company secured the prospecting and mining rights, and after it bought the farm for R70 million.
Initially, it partnered with IchorCoal, an established mining company with interests in 16 mines in Mpumalanga and Limpopo, but it got its big break in February when the IDC agreed to the loan.
“We met the IDC and submitted our mining rights documents, feasibility studies and business plan. Within 45 days, we were signing the loan agreement,” says Mthombeni.
“We will always be grateful to the IDC. It fulfilled its mandate to develop a black-owned company.”
Mthombeni says the mine has about 500 million tons of coal, which guarantees it a lifespan of at least 15 years.
Over the next three years, the company plans to increase production and double the workforce.
The 300 jobs the mine has already created are much needed in the Victor Khanye Local Municipality, which has a population of 75 452 and an unemployment rate of 28.2%. Of the unemployed, 38.5% are young people.
Mthombeni says it is still too early for Mbuyelo Coal to start any meaningful community and corporate social responsibility projects, but it is planning to help the municipality rebuild a public library that was burnt down during recent service-delivery protests.
“We’re in the first phase of the mining project, so the focus is still on training and employing local people. Later, we will see how we get involved in community projects,” says Mthombeni.
Rirhandzu Siweya (40), a former corporate and commercial lawyer, founded Mbuyelo Coal 10 years ago – shortly after the passing of the Mineral and Petroleum Resources Development Act, which gave the state power to grant, control, administer or refuse prospecting and mining rights and permits.
Siweya saw an opportunity and teamed up with former miner Donald Muller to start negotiations with Mpumalanga farmers about possible partnership deals after analysing the province’s coal fields using data from the Council for Geoscience.
Mbuyelo Coal applied for about 400 mining rights. Many were unsuccessful, but Manungu Colliery is one of five it managed to bag.
Reaching for his dreams
He’s hustled and worked at a bottle store, a seedling company and a waste firm, but now Sibusiso Jiyane (29) has bagged his first permanent job.
Eight years ago, Jiyane had to drop out of school in Grade 11 when his father lost his job.
Today, the man from Delpark Extension 4 in Delmas is a tractor-loader-backhoe operator. The gigantic workhorse he uses to scoop coal into trucks is more commonly called a TLB.
He loads coal into trucks, which then distribute it to Eskom’s power stations in Mpumalanga, including Kusile, Camden, Grootvlei, Duvha, Hendrina and Majuba.
On his basic salary of R5 000 a month, which increases to R9 000 with overtime pay, Jiyane supports his two daughters, aged 10 and 11, his parents and a 15-year-old sister who’s currently in Grade 9.
“This is my first full-time job – it has given me hope for the future. My dreams are being fulfilled,” he said.
Jiyane has begun building a four-roomed house for his family and, in the two months he has been employed at Manungu, has completed one room.
Jiyane learnt how to drive a tractor, and later a TLB, as a teenager working as a labourer on a farm on weekends and during school holidays.
He went on to work as a TLB operator at SA Zero Waste and Kendal Mine in Emalahleni on a series of short-term contracts. Before that, he sold liquor at a bottle store, but when that business was sold, he lost his job.
“I decided to join the Manungu mine because it gave me a better offer and opportunity. I see a future here. I can plan my life properly,” he said.
A PROJECT IN PARTNERSHIP WITH THE IDC
