Shanduka buys Glencore stake in coal unit
Johannesburg - South Africa's Shanduka Group said on Wednesday it has gained majority control of a coal venture it operates with global commodity trader Glencore to have a bigger say in the running of its coal assets.
Shanduka, an unlisted investment holding company chaired by politician turned businessman Cyril Ramaphosa, increased its stake in Shanduka Coal to 50.01% from 30%.
Shanduka and Glencore will share operational control of the joint venture.
"The decision to increase our shareholding in Shanduka Coal is in line with our strategy of expanding our investment in the coal sector and becoming more operationally involved," CEO Phuti Malabie said in a statement.
The group will pay R370m and use some of its other coal assets, including a 30% stake in Kangra Coal, to fund the deal.
The group also plans to spend R200m to develop future coal projects over the next five years.
Shanduka Coal's operating mines include the Graspan, Middelburg Townlands and Springlake collieries in South Africa.
The coal joint venture currently produces about 7 million tonnes of saleable coal per year, which is sold domestically to power utility Eskom and exported to international markets.
"Despite current global uncertainties, the outlook for coal remains robust. Our continued investment in the South African mining industry is indicative of the value we see in its prospects," Malabie said.
The deal is still subject to approval by the competition authority and the department of mineral resources.