Thu Feb 9, 2012
* H1 headline EPS 76.04 cts vs 139.22 cts
* H1 saleable coal output down 16 pct
* Cuts FY export production outlook
JOHANNESBURG, Feb 9 (Reuters) - Optimum Coal, the takeover target of top commodity trader Glencore, on Thursday forecast a better second half after strikes at one of its mines hit output and led to a 45 percent drop in first-half profit.
Optimum said headline earnings per share for the six months to the end of December were 76.04 cents, compared to 139.22 cents previously. Headline EPS are the main profit gauge in South Africa and strip out certain one-time items.
Optimum said first-half production of saleable coal fell 16 percent to 5.9 million tonnes.
Production of coal destined for exports fell 20 percent to 2.9 million tonnes, while output of coal destined for power utility Eskom slumped 11 percent to 3 million tonnes.
The company, South Africa's sixth largest coal producer, cut its full-year guidance for export saleable production from Optimum Collieries to between 4.6-4.8 million tonnes on the back of the labour disputes.
The company had initially forecast for Optimum Collieries to deliver between 5.3-5.5 million tonnes of coal destined for exports. The revision should impact Optimum's previous full-year guidance of total coal output of around 13.7 million tonnes.
The company said that while export coal prices had recently softened to about $105 per tonne due to what could be a prolonged European recession, inventory re-stocking would support prices in the near term.
It also expected the domestic coal market to remain strong with robust demand from Eskom ensuring strong uptake.
Coal producers targetting export markets have been squeezed by lack of adequate rail capacity and delivery challenges faced by the country's state-owned logistics group Transnet.
Optimum said things were improving with Transnet's freight rail unit moving coal to the Richards Bay Coal Terminal at an annualised rate of 70 million tonnes over the last five months of 2011.
Transnet also plans to free up additional capacity on the coal export line by diverting all the general freight via a new line through Swaziland.
"This is extremely encouraging from a coal export and project development perspective," Optimum Chief Executive Mike Teke said in a statement.
Optimum shares are up 0.69 percent so far this year, compared with a 6.22 percent rise in the JSE All-Share index .
(sourced Reuters.com)
Showing posts with label Optimum Coal Holdings. Show all posts
Showing posts with label Optimum Coal Holdings. Show all posts
Thursday, February 9, 2012
Tuesday, January 10, 2012
S.Africa 2011 Richards Bay coal exports rise 3.3%
Tue, Jan10, 2012
JOHANNESBURG (Reuters) - South Africa's coal exports from the Richards Bay terminal rose 3.3 percent to 65.5 million tonnes in 2011, the terminal's data showed on Monday, as improvements on the rail lines leading to the port started to pay off.
State-owned logistics group Transnet has been investing heavily to upgrade its lines and to invest in new wagons and locomotives, but export figures are still far below the coal terminal's expanded capacity of 91 million tonnes.
Coal producers in South Africa including Anglo American, BHP Billiton, Exxaro, Optimum Coal and Xstrata have been eager to export more coal to meet rising demand from India and China but have been limited by bottlenecks on the lines leading to the port.
Last week, South Africa's coal exporters provided a slightly lower 2011 export estimate of 64.6 million tonnes, a rise of 1.9 percent.
Transnet has said it will take until at least 2015 to be able to carry 81 million tonnes to the Richards Bay Coal Terminal (RBCT) each year.
The group also plans to free up an additional 14 million tonnes of capacity on the coal line by moving non-coal cargo to a new line via Swaziland.
Coal producers have begun to look beyond South Africa and explore export routes via Mozambique and Namibia, although the rail links or expansion at the relevant ports are still in the planning stage or would involve higher costs.
Coal stocks at the terminal stood at 3.3 million tonnes at the end of December, RBCT added.
(sourced Reuters)
JOHANNESBURG (Reuters) - South Africa's coal exports from the Richards Bay terminal rose 3.3 percent to 65.5 million tonnes in 2011, the terminal's data showed on Monday, as improvements on the rail lines leading to the port started to pay off.
State-owned logistics group Transnet has been investing heavily to upgrade its lines and to invest in new wagons and locomotives, but export figures are still far below the coal terminal's expanded capacity of 91 million tonnes.
Coal producers in South Africa including Anglo American, BHP Billiton, Exxaro, Optimum Coal and Xstrata have been eager to export more coal to meet rising demand from India and China but have been limited by bottlenecks on the lines leading to the port.
Last week, South Africa's coal exporters provided a slightly lower 2011 export estimate of 64.6 million tonnes, a rise of 1.9 percent.
Transnet has said it will take until at least 2015 to be able to carry 81 million tonnes to the Richards Bay Coal Terminal (RBCT) each year.
The group also plans to free up an additional 14 million tonnes of capacity on the coal line by moving non-coal cargo to a new line via Swaziland.
Coal producers have begun to look beyond South Africa and explore export routes via Mozambique and Namibia, although the rail links or expansion at the relevant ports are still in the planning stage or would involve higher costs.
Coal stocks at the terminal stood at 3.3 million tonnes at the end of December, RBCT added.
(sourced Reuters)
Friday, November 18, 2011
Optimum Coal minorities to get takeover offer
Glencore had announced an expression of interest in a controlling stake that valued Optimum at R34 per share, offer to buy remaining shares will be made
Fri, Nov18, 2011
A CONSORTIUM of Glencore and Cyril Ramaphosa’s Lexshell will make a mandatory offer to Optimum Coal shareholders next year after it agreed to buy shares in the thermal coal company, lifting its stake to 65,14%, Optimum said yesterday.
The offer to buy the remaining shares in Optimum it does not own will be made at not less than R38 per share. In September, Glencore announced an expression of interest to acquire a controlling interest in Optimum with Mr Ramaphosa in a deal that valued Optimum at R34 per share.
The consortium told Optimum’s board that it was moving away from a general offer to buy the company to making a mandatory offer for the shares it does not own once it has regulatory approval to do so in the first quarter of next year.
"The consortium informed the board that it believes that it will be preferable to make the mandatory offer as opposed to the general offer, because the mandatory offer will be unconditional and capable of immediate implementation once accepted by Optimum shareholders," Optimum said.
Glencore, the world’s largest commodity trader, will assume marketing rights for Optimum’s coal after the consortium agreed to buy a 6,45% stake in Optimum held by Mercuria Energy Asset Management, which had the marketing contract.
This should take place from the middle of next year.
"Not only does Glencore have a strong balance sheet, but we believe the Ramaphosa interests will have benefited from the sale of Shanduka Resources’ Assore stake," said Imara SP Reid’s Steve Meintjes, referring to the R2,6bn raised by Shanduka from the sale of its 11,7% stake in Assore, a JSE-listed manganese, chrome and iron ore miner.
"We believe this deal is therefore beneficial for the company as it introduces shareholders with strong balance sheets capable of funding the available organic and acquisition growth opportunities.
sourced BusinessDay
Fri, Nov18, 2011
A CONSORTIUM of Glencore and Cyril Ramaphosa’s Lexshell will make a mandatory offer to Optimum Coal shareholders next year after it agreed to buy shares in the thermal coal company, lifting its stake to 65,14%, Optimum said yesterday.
The offer to buy the remaining shares in Optimum it does not own will be made at not less than R38 per share. In September, Glencore announced an expression of interest to acquire a controlling interest in Optimum with Mr Ramaphosa in a deal that valued Optimum at R34 per share.
The consortium told Optimum’s board that it was moving away from a general offer to buy the company to making a mandatory offer for the shares it does not own once it has regulatory approval to do so in the first quarter of next year.
"The consortium informed the board that it believes that it will be preferable to make the mandatory offer as opposed to the general offer, because the mandatory offer will be unconditional and capable of immediate implementation once accepted by Optimum shareholders," Optimum said.
Glencore, the world’s largest commodity trader, will assume marketing rights for Optimum’s coal after the consortium agreed to buy a 6,45% stake in Optimum held by Mercuria Energy Asset Management, which had the marketing contract.
This should take place from the middle of next year.
"Not only does Glencore have a strong balance sheet, but we believe the Ramaphosa interests will have benefited from the sale of Shanduka Resources’ Assore stake," said Imara SP Reid’s Steve Meintjes, referring to the R2,6bn raised by Shanduka from the sale of its 11,7% stake in Assore, a JSE-listed manganese, chrome and iron ore miner.
"We believe this deal is therefore beneficial for the company as it introduces shareholders with strong balance sheets capable of funding the available organic and acquisition growth opportunities.
sourced BusinessDay
Thursday, October 27, 2011
S.Africa's Transnet says moving RBCT coal at record
Thu,Oct 227, 2011
JOHANNESBURG (Reuters) - South Africa's logistics group Transnet has been moving coal to the Richards Bay Coal Terminal at record rates in recent months, showing the market that it may be turning the corner and reversing years of underperforming infrastructure.
Chief Executive Brian Molefe said on Wednesday that the company had recently managed to move 1.6 million tonnes of coal per week and expected to keep up the pace, while exports from the terminal had been around 1.4 million tonnes.
Coal producers in South Africa, including Anglo American, BHP Billiton, Exxaro, Optimum Coal and Xstrata, have long been eager to export more coal to meet rising demand from India and China.
"In the last three months we had record numbers of trains going to RBCT ... there are stockpiles at the terminal of around 5 million tonnes," Molefe told journalists, adding the company was exploring options to also transport coal to alternative ports around RBCT to ensure more shipments go out.
"Maybe we caught them (coal exporters) by surprise. I'm sure in the next few weeks they will catch their breath and ramp up their export capacity," he said, adding that the allocation of coal export capacity to emerging miners needed to be increased.
Transnet moved 63 million tonnes of coal to RBCT last year, far below the terminal's capacity of 91 million tonnes, but the logistics firm is investing heavily to raise capacity on the rail line to 81 million tonnes by 2015.
SWAZI LINK
The group also plans to free up an additional 14 million tonnes of capacity on the coal line by moving non-coal cargo to a new line via Swaziland.
The Swazi link, expected within six years, will cost around 12.3 billion rand.
Some 7.3 billion of that will be financed by Swazi Rail, and Molefe said its counterpart in the landlocked African state was confident it would find the money to build the link, despite the impoverished country's current economic woes.
Molefe also said a planned rail link to the Waterberg coal fields would be completed within the same six-year period and would carry over 20 million tonnes of coal per year.
Waterberg is expected to become the country's next coal hub and supply domestic power plants and exports as reserves in the Witbank area near depletion.
For years Transnet and the private sector have been discussing the option of using public-private partnerships (PPPs) to up volumes on the coal, iron ore or manganese lines, but Molefe said the company should be able to do it on its own.
"I don't see much scope for PPPs on those lines because our performance is good and we are improving volumes quite rapidly. One shouldn't temper with what is not broken," he said.
The company is working to expand the capacity on the iron ore line to 60 million tonnes from 47 million, and Molefe said the company is already studying the option of expanding the line beyond that, going up to 70-80 million tonnes a year.
Molefe said Transnet had just signed a 6 billion rand loan facility with the African Development Bank, and he saw no problems in raising funds needed for future expansion.
State owned Transnet said its earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months to end-September rose 27 percent to 9.4 billion rand, while revenue was up 20 percent to 22.4 billion rand.
(sourced Reuters)
JOHANNESBURG (Reuters) - South Africa's logistics group Transnet has been moving coal to the Richards Bay Coal Terminal at record rates in recent months, showing the market that it may be turning the corner and reversing years of underperforming infrastructure.
Chief Executive Brian Molefe said on Wednesday that the company had recently managed to move 1.6 million tonnes of coal per week and expected to keep up the pace, while exports from the terminal had been around 1.4 million tonnes.
Coal producers in South Africa, including Anglo American, BHP Billiton, Exxaro, Optimum Coal and Xstrata, have long been eager to export more coal to meet rising demand from India and China.
"In the last three months we had record numbers of trains going to RBCT ... there are stockpiles at the terminal of around 5 million tonnes," Molefe told journalists, adding the company was exploring options to also transport coal to alternative ports around RBCT to ensure more shipments go out.
"Maybe we caught them (coal exporters) by surprise. I'm sure in the next few weeks they will catch their breath and ramp up their export capacity," he said, adding that the allocation of coal export capacity to emerging miners needed to be increased.
Transnet moved 63 million tonnes of coal to RBCT last year, far below the terminal's capacity of 91 million tonnes, but the logistics firm is investing heavily to raise capacity on the rail line to 81 million tonnes by 2015.
SWAZI LINK
The group also plans to free up an additional 14 million tonnes of capacity on the coal line by moving non-coal cargo to a new line via Swaziland.
The Swazi link, expected within six years, will cost around 12.3 billion rand.
Some 7.3 billion of that will be financed by Swazi Rail, and Molefe said its counterpart in the landlocked African state was confident it would find the money to build the link, despite the impoverished country's current economic woes.
Molefe also said a planned rail link to the Waterberg coal fields would be completed within the same six-year period and would carry over 20 million tonnes of coal per year.
Waterberg is expected to become the country's next coal hub and supply domestic power plants and exports as reserves in the Witbank area near depletion.
For years Transnet and the private sector have been discussing the option of using public-private partnerships (PPPs) to up volumes on the coal, iron ore or manganese lines, but Molefe said the company should be able to do it on its own.
"I don't see much scope for PPPs on those lines because our performance is good and we are improving volumes quite rapidly. One shouldn't temper with what is not broken," he said.
The company is working to expand the capacity on the iron ore line to 60 million tonnes from 47 million, and Molefe said the company is already studying the option of expanding the line beyond that, going up to 70-80 million tonnes a year.
Molefe said Transnet had just signed a 6 billion rand loan facility with the African Development Bank, and he saw no problems in raising funds needed for future expansion.
State owned Transnet said its earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months to end-September rose 27 percent to 9.4 billion rand, while revenue was up 20 percent to 22.4 billion rand.
(sourced Reuters)
Saturday, October 22, 2011
Miners lead S.African stocks higher
Oct22, 2011
By Tiisetso Motsoeneng
JOHANNESBURG (Reuters) - South African stocks ended sharply higher on Friday, booking their third straight day of gains, with miners among the top performers as commodity prices cruised higher.
Bourse heavyweight BHP Billiton jumped 4.26 percent to 245 rand, Kumba Iron Ore added 3.66 percent to 457.13 rand and Assore improved 2.99 percent to 208.1 rand.
Optimism that euro zone politicians will come up with a comprehensive plan to resolve the region's two-year debt crisis added to the overall bullish sentiment.
The JSE Top-40 blue-chip index was 2.25 percent better at 28,165.61, while the broader All-share index added 1.99 percent to 31,449.99.
"We believe investors may be drawn back to markets on the back of renewed hopes for a solution to the euro zone crisis," said Kavita Patel, a trader at Sasfin Securities.
Others gainers included luxury goods group Richemont, which added 3.88 percent to 43.93 rand. "We believe this stock will continue to do well as an increasing portion of its sales are derived from emerging markets," Patel said.
On the downside, Vodacom lost 1.03 percent to 86.60 rand after its joint venture partner in the Democratic Republic of Congo filed a lawsuit to block the mobile phone operator from selling its majority stake in the unit.
Murray & Roberts was off 0.49 percent to 24.50 rand after the construction firm released a downbeat trading update, saying trading conditions remained weak at home and in the Middle East.
(source Reuters)
By Tiisetso Motsoeneng
JOHANNESBURG (Reuters) - South African stocks ended sharply higher on Friday, booking their third straight day of gains, with miners among the top performers as commodity prices cruised higher.
Bourse heavyweight BHP Billiton jumped 4.26 percent to 245 rand, Kumba Iron Ore added 3.66 percent to 457.13 rand and Assore improved 2.99 percent to 208.1 rand.
Optimism that euro zone politicians will come up with a comprehensive plan to resolve the region's two-year debt crisis added to the overall bullish sentiment.
The JSE Top-40 blue-chip index was 2.25 percent better at 28,165.61, while the broader All-share index added 1.99 percent to 31,449.99.
"We believe investors may be drawn back to markets on the back of renewed hopes for a solution to the euro zone crisis," said Kavita Patel, a trader at Sasfin Securities.
Others gainers included luxury goods group Richemont, which added 3.88 percent to 43.93 rand. "We believe this stock will continue to do well as an increasing portion of its sales are derived from emerging markets," Patel said.
On the downside, Vodacom lost 1.03 percent to 86.60 rand after its joint venture partner in the Democratic Republic of Congo filed a lawsuit to block the mobile phone operator from selling its majority stake in the unit.
Murray & Roberts was off 0.49 percent to 24.50 rand after the construction firm released a downbeat trading update, saying trading conditions remained weak at home and in the Middle East.
(source Reuters)
Tuesday, October 11, 2011
Shanduka seeks controlling stake in coal JV
Tuesday, 11 Oct 2011
It is reported that Shanduka Group hopes to conclude a deal before the end of the year which would increase its stake in a coal venture with global trader Glencore to a controlling one.
Mr Phuti Malabie Chief Executive of Shanduka said "For our growth, we are not necessarily looking at new acquisitions. At our existing investments, we are looking for significant shareholdings or controlling equity stakes, getting deeper into those businesses we are already in."
Mr Malabie also told the paper there were no immediate plans to list the group or any parts of its businesses.
Shanduka said earlier this week that it may invest BRL 1.1 billion for control and management of Lonmin Limpopo division.
Together with Glencore, Shanduka has also expressed interest to bid for Optimum Coal South Africa sixth-largest producer.
Shanduka is an investment group run by prominent politician-turned-businessman Cyril Ramaphosa.
(sourced from miningmx)
It is reported that Shanduka Group hopes to conclude a deal before the end of the year which would increase its stake in a coal venture with global trader Glencore to a controlling one.
Mr Phuti Malabie Chief Executive of Shanduka said "For our growth, we are not necessarily looking at new acquisitions. At our existing investments, we are looking for significant shareholdings or controlling equity stakes, getting deeper into those businesses we are already in."
Mr Malabie also told the paper there were no immediate plans to list the group or any parts of its businesses.
Shanduka said earlier this week that it may invest BRL 1.1 billion for control and management of Lonmin Limpopo division.
Together with Glencore, Shanduka has also expressed interest to bid for Optimum Coal South Africa sixth-largest producer.
Shanduka is an investment group run by prominent politician-turned-businessman Cyril Ramaphosa.
(sourced from miningmx)
Wednesday, October 5, 2011
S.Africa coal exports fall m/m in Sept to 4.96 mln Ton
Wed Oct 5, 2011
JOHANNESBURG Oct 5 (Reuters) - South Africa's Richards Bay Coal Terminal (RBCT) exported 4.96 million tonnes of coal in September compared with 6.987 million tonnes the previous month, RBCT data showed on Wednesday.
South Africa -- a major exporter of coal to power stations in Europe and Asia -- had 4.997 million tonnes of stock at the terminal at the end of September, RBCT said.
Coal producers in South Africa include Anglo American , BHP Billiton , Exxaro , Optimum Coal and Xstrata .
(sourced Reuters)
JOHANNESBURG Oct 5 (Reuters) - South Africa's Richards Bay Coal Terminal (RBCT) exported 4.96 million tonnes of coal in September compared with 6.987 million tonnes the previous month, RBCT data showed on Wednesday.
South Africa -- a major exporter of coal to power stations in Europe and Asia -- had 4.997 million tonnes of stock at the terminal at the end of September, RBCT said.
Coal producers in South Africa include Anglo American , BHP Billiton , Exxaro , Optimum Coal and Xstrata .
(sourced Reuters)
Sunday, September 11, 2011
Optimum says possible offer to be at least 38 rand/shr
Sep11, 2011
* Proposed price raised from initial offer of 34 rand/shr
* Change follows Glencore purchase of more shares in Optimum
* Alternative buyer withdraws interest in company
JOHANNESBURG, Sept 9 (Reuters) - Optimum Coal said on Friday that should an offer be made for the company by a consortium including trader Glencore and a vehicle of politician turned businessman Cyril Ramaphosa, the price would not be lower than 38 rand per share.
A consortium including a Glencore subsidiary, Piruto BV, and Ramaphosa's Lexshell 849 confirmed on Sept. 1 that it was interested in buying a controlling stake in South Africa's sixth-biggest coal miner, deemed attractive due to its reserves and access to the Richards Bay Coal Terminal (RBCT).
Optimum said the change came after a member of the consortium bought additional shares in the company.
Glencore said on Thursday it had raised its stake in the takeover target to 25.8 percent after it bought about 2.5 million shares at a price of 37.99 rand a share. The price is more than the 34 rand per share the consortium had so far publicly offered.
"The board has been informed by the consortium that if the proposed offer is made within a period of 6 months from 6 September 2011, the offer consideration will not be lower than 38.00 rand per Optimum share," the company said in a statement.
Optimum also said an alternative party, which was mentioned in an announcement earlier this month, had withdrawn its interest in acquiring a controlling stake in the coal producer.
The 38 rand offer would value the company at 9.57 billion rand ($1.34 billion).
Optimum, a mid-size producer with large export capacity at Richards Bay Coal Terminal and reserves, attracted keen buying interest from local and international companies since BHP Billiton originally put the mine up for sale.
South African coal is a key source of supply to both the European and Asian markets, particularly India - South Africa ships around 30 percent of its coal to India and increasingly, to China.
The acquisition would give Glencore access to two operating assets, the Optimum Collieries and Koornfontein Mines, as well as 8 million tons of coal export entitlements from RBCT.
Shares in Optimum, up 42.4 percent so far this year, were flat at 37.50 rand by 1256 GMT, compared with a 0.59 percent fall in Johannesburg's All-Share index .
(sourced Reuters)
* Proposed price raised from initial offer of 34 rand/shr
* Change follows Glencore purchase of more shares in Optimum
* Alternative buyer withdraws interest in company
JOHANNESBURG, Sept 9 (Reuters) - Optimum Coal said on Friday that should an offer be made for the company by a consortium including trader Glencore and a vehicle of politician turned businessman Cyril Ramaphosa, the price would not be lower than 38 rand per share.
A consortium including a Glencore subsidiary, Piruto BV, and Ramaphosa's Lexshell 849 confirmed on Sept. 1 that it was interested in buying a controlling stake in South Africa's sixth-biggest coal miner, deemed attractive due to its reserves and access to the Richards Bay Coal Terminal (RBCT).
Optimum said the change came after a member of the consortium bought additional shares in the company.
Glencore said on Thursday it had raised its stake in the takeover target to 25.8 percent after it bought about 2.5 million shares at a price of 37.99 rand a share. The price is more than the 34 rand per share the consortium had so far publicly offered.
"The board has been informed by the consortium that if the proposed offer is made within a period of 6 months from 6 September 2011, the offer consideration will not be lower than 38.00 rand per Optimum share," the company said in a statement.
Optimum also said an alternative party, which was mentioned in an announcement earlier this month, had withdrawn its interest in acquiring a controlling stake in the coal producer.
The 38 rand offer would value the company at 9.57 billion rand ($1.34 billion).
Optimum, a mid-size producer with large export capacity at Richards Bay Coal Terminal and reserves, attracted keen buying interest from local and international companies since BHP Billiton originally put the mine up for sale.
South African coal is a key source of supply to both the European and Asian markets, particularly India - South Africa ships around 30 percent of its coal to India and increasingly, to China.
The acquisition would give Glencore access to two operating assets, the Optimum Collieries and Koornfontein Mines, as well as 8 million tons of coal export entitlements from RBCT.
Shares in Optimum, up 42.4 percent so far this year, were flat at 37.50 rand by 1256 GMT, compared with a 0.59 percent fall in Johannesburg's All-Share index .
(sourced Reuters)
Tuesday, September 6, 2011
Glencore Raises Optimum Stake to 23.9% as It Boosts Price Paid for Shares Q
Tue,Sep 6, 2011
By Jesse Riseborough
Glencore International Plc, the largest publicly traded commodities supplier, raised its stake in Optimum Coal Holdings (OPT) Ltd., buying shares at 12 percent above the price it proposed last week.
Glencore’s Piruto BV unit purchased 24.6 million shares on the market yesterday at 38 rand ($5.34) apiece, taking the Baar, Switzerland-based company’s stake to 23.9 percent, it said today in a statement. Glencore acquired 14.1 percent of Optimum on Aug. 29 and on Sept. 1 proposed a cash offer of 34 rand a share that valued the South African company at $1.2 billion.
Under takeover regulations, “if an offer is made by Glencore or any of its concert parties for the remaining shares in Optimum within a period of six months from the date of this announcement, the offer consideration will not be lower than 38 rand per share,” according to the statement.
Optimum Coal is South Africa’s fourth-largest coal exporter and owns mines and port capacity. Glencore said last week it had secured agreements that may expand its holding to 43.5 percent.
Glencore gained 2.3 percent to 385.2 pence at the 4:30 p.m. close in London trading. Optimum fell 2.6 percent to 37.01 rand in Johannesburg. An offer of 38 rand a share would value the company at about $1.34 billion.
(sourced Bloomberg)
By Jesse Riseborough
Glencore International Plc, the largest publicly traded commodities supplier, raised its stake in Optimum Coal Holdings (OPT) Ltd., buying shares at 12 percent above the price it proposed last week.
Glencore’s Piruto BV unit purchased 24.6 million shares on the market yesterday at 38 rand ($5.34) apiece, taking the Baar, Switzerland-based company’s stake to 23.9 percent, it said today in a statement. Glencore acquired 14.1 percent of Optimum on Aug. 29 and on Sept. 1 proposed a cash offer of 34 rand a share that valued the South African company at $1.2 billion.
Under takeover regulations, “if an offer is made by Glencore or any of its concert parties for the remaining shares in Optimum within a period of six months from the date of this announcement, the offer consideration will not be lower than 38 rand per share,” according to the statement.
Optimum Coal is South Africa’s fourth-largest coal exporter and owns mines and port capacity. Glencore said last week it had secured agreements that may expand its holding to 43.5 percent.
Glencore gained 2.3 percent to 385.2 pence at the 4:30 p.m. close in London trading. Optimum fell 2.6 percent to 37.01 rand in Johannesburg. An offer of 38 rand a share would value the company at about $1.34 billion.
(sourced Bloomberg)
Thursday, September 1, 2011
Optimum Coal says Glencore interested in acquiring it
Thu Sep 1, 2011
* Glencore's biggest target since its listing
* Asian giants hungry for S.African coal
JOHANNESBURG, SEPT 1 - South Africa's Optimum Coal confirmed on Thursday a consortium including a unit of commodity trading giant Glencore , and prominent local politician-turned tycoon Cyril Ramaphosa was interested in buying it for about $1 billion.
The move on Optimum, South Africa's sixth-largest coal producer, is seen as showing Glencore's appetite for deals in volatile equity and commodity markets, which it has said will produce bargains.
"The proposed transaction would include a general offer to the shareholders of Optimum for a cash consideration of 34 rand per share," Optimum said in a statement.
That would value it at around $1 billion and be a premium of 1.25 rand per share on the 32.75 rand its stock price was fetching in early Thursday trading.
Optimum said the consortium includes Piruto B.V., a wholly owned subsidiary of Glencore, and Lexshell 849 Investments Limited, a company owned by Ramaphosa.
Sources last week said Glencore and Ramaphosa were stalking Optimum, and on Monday, the South African company said Piruto B.V. had taken a 14.1 percent stake in it.
This would be Glencore's most significant purchase since its record listing, when it sacrificed its fiercely protected privacy to gain the balance sheet firepower for acquisitions.
Glencore's deep pockets and Ramaphosa's influence would make for a formidable bid that could nullify any opposition arising from shareholders, some of whom may be reluctant to see the trader extend its reach in South Africa.
Optimum, a mid-size producer has export capacity and reserves that make it attractive prey for big foreign companies hoping to capitalise on Indian and Chinese demand.
* Glencore's biggest target since its listing
* Asian giants hungry for S.African coal
JOHANNESBURG, SEPT 1 - South Africa's Optimum Coal confirmed on Thursday a consortium including a unit of commodity trading giant Glencore , and prominent local politician-turned tycoon Cyril Ramaphosa was interested in buying it for about $1 billion.
The move on Optimum, South Africa's sixth-largest coal producer, is seen as showing Glencore's appetite for deals in volatile equity and commodity markets, which it has said will produce bargains.
"The proposed transaction would include a general offer to the shareholders of Optimum for a cash consideration of 34 rand per share," Optimum said in a statement.
That would value it at around $1 billion and be a premium of 1.25 rand per share on the 32.75 rand its stock price was fetching in early Thursday trading.
Optimum said the consortium includes Piruto B.V., a wholly owned subsidiary of Glencore, and Lexshell 849 Investments Limited, a company owned by Ramaphosa.
Sources last week said Glencore and Ramaphosa were stalking Optimum, and on Monday, the South African company said Piruto B.V. had taken a 14.1 percent stake in it.
This would be Glencore's most significant purchase since its record listing, when it sacrificed its fiercely protected privacy to gain the balance sheet firepower for acquisitions.
Glencore's deep pockets and Ramaphosa's influence would make for a formidable bid that could nullify any opposition arising from shareholders, some of whom may be reluctant to see the trader extend its reach in South Africa.
Optimum, a mid-size producer has export capacity and reserves that make it attractive prey for big foreign companies hoping to capitalise on Indian and Chinese demand.
Friday, August 26, 2011
S.Africa's Optimum Coal confirms bid interest
Fri Aug 26, 2011 | By Reuters
JOHANNESBURG (Reuters) - South Africa's Optimum Coal Holdings confirmed on Friday it had received expressions of interest from unnamed third parties, a day after sources close to the deal said commodities trader Glencore was eyeing the miner.
Optimum, South Africa's sixth-largest coal producer, said in a statement it had received "unsolicited, non-binding expressions of interest from third parties to acquire a controlling interest in Optimum".
At current prices, Optimum has a market capitalisation of around $1 billion.
"Shareholders are advised that there is currently no certainty that Optimum will receive a firm intention to make an offer from any party," it added, giving no further details.
Optimum had already issued a cautionary statement earlier this month, alerting investors to circumstances which could affect its share price, but had denied having been approached by any prospective buyer.
The sources close to the deal had told Reuters on Thursday that Glencore and South African partner Cyril Ramaphosa were talking to Optimum shareholders and were preparing to make an announcement.
Shareholders in Optimum confirmed they had received an offer from the commodities giant and Ramaphosa, whose unlisted Shanduka Resources owns 30 percent of Shanduka Coal, a venture with Glencore.
Shanduka Coal, 70 percent owned by Glencore, has until recently been Glencore's vehicle for investment in coal mining in South Africa.
OCH, formerly owned by miner BHP Billiton, will produce 13.7 million tonnes of coal in 2011, up from 13.6 million in 2010.
JOHANNESBURG (Reuters) - South Africa's Optimum Coal Holdings confirmed on Friday it had received expressions of interest from unnamed third parties, a day after sources close to the deal said commodities trader Glencore was eyeing the miner.
Optimum, South Africa's sixth-largest coal producer, said in a statement it had received "unsolicited, non-binding expressions of interest from third parties to acquire a controlling interest in Optimum".
At current prices, Optimum has a market capitalisation of around $1 billion.
"Shareholders are advised that there is currently no certainty that Optimum will receive a firm intention to make an offer from any party," it added, giving no further details.
Optimum had already issued a cautionary statement earlier this month, alerting investors to circumstances which could affect its share price, but had denied having been approached by any prospective buyer.
The sources close to the deal had told Reuters on Thursday that Glencore and South African partner Cyril Ramaphosa were talking to Optimum shareholders and were preparing to make an announcement.
Shareholders in Optimum confirmed they had received an offer from the commodities giant and Ramaphosa, whose unlisted Shanduka Resources owns 30 percent of Shanduka Coal, a venture with Glencore.
Shanduka Coal, 70 percent owned by Glencore, has until recently been Glencore's vehicle for investment in coal mining in South Africa.
OCH, formerly owned by miner BHP Billiton, will produce 13.7 million tonnes of coal in 2011, up from 13.6 million in 2010.
Optimum Coal shares rise 6 percent on bid talk
Fri Aug 26, 2011
JOHANNESBURG (Reuters) - Shares in South African miner Optimum Coal soared six percent higher in early trading on Friday after the company confirmed reports that unnamed third parties were interested in buying out the firm.
Its share price at 0705 GMT was 31.80 rand, its highest in about four months, according to Thomson Reuters' data. On Thursday, sources close to the deal said commodities trader Glencore was eyeing the miner.
Glencore, S. Africa partner eye Optimum Coal
Aug26, 2011
LONDON (Reuters) - Commodities trading giant Glencore (GLEN.L) and South African partner Cyril Ramaphosa are interested in buying miner Optimum Coal Holdings (OPTJ.J) and are preparing a formal announcement, sources close to the deal said on Thursday.
Shareholders in South Africa's sixth-largest coal producer confirmed they had received an offer from the commodities giant and partner Ramaphosa, whose unlisted Shanduka Resources owns 30 percent of Shanduka Coal, a venture with Glencore.
OCH last week issued a cautionary statement, alerting investors to circumstances which could affect its share price, but has denied having been approached by any prospective buyer.
OCH, formerly owned by mining giant BHP Billiton (BLT.L), will produce 13.7 million tonnes of coal in 2011, up from 13.6 million in 2010.
"Glencore is committed to long-term investment in South Africa," one of the sources close to the deal said.
"Glencore and its partner fully recognise that Optimum has a broad-based Black Economic Empowerment ownership and is a benchmark for transformation and would not seek to prejudice Optimum's BEE credentials," the source added.
Glencore, which has $10.4 billion of cash it could spend, is considering acquisitions more aggressively because the current market turmoil has caused the price of listed assets to drop while private companies were less optimistic about their outlook.
"Is this the bottom? I don't know, but it is definitely a better time to look at acquisitions," Glencore Chief Executive Officer Ivan Glasenberg told reporters earlier on Thursday when the company's second quarter results were announced.
Shanduka Coal, 70 percent owned by Glencore, has until recently been Glencore's vehicle for investment in coal mining in South Africa.
Shanduka Coal owns 100 percent of the Graspan, Townlands, Bankfontein, Leeuwfontein and Lakeside coal mines, which were acquired between 2006-2007.
According to Glencore's website, their total run of mine production capacity is around 9 million tonnes a year.
"We have been made an offer but we haven't decided yet, our board meets on Saturday to decide one way or another," said Mandla Tshabalala of Mobu Resources Pty Limited, a minority shareholder in OCH.
"We don't want to just cash out and retire to the Bahamas, we have expertise in mining and it's not our government'a policy for junior miners to be purely silent cash investors, we want to be involved in any new entity," he added.
Asked to comment on Glencore's move to buy OCH by buying from the various entities who own stakes in it, a senior mining industry source with connections to OCH said: "the structure may not turn out to be quite as you describe it."
Earlier on Thursday OCH Chief Executive Officer Mike Teke said, when asked if he saw OCH as a target for consolidation: "We are acquisitive about being a target, I'm not sure. We see ourselves as an operating asset, as being acquisitive and looking at others as targets." [
Asked if OCH had been approached by anybody, Teke said "no."
Later in the day, asked about a Glencore bid, Teke declined to comment when asked if OCH had been approached.
"Last week we issued a cautionary and I prefer not to comment," he told Reuters.
Optimum was avidly pursued by several majority black-owned junior miners when BHP put it up for sale and some of these players remain determined to derail Glencore's bid for what was one of BHP's most prized assets.
Aside from producing export grade coal, Optimum is the key supplier of fuel to state power utility Eskom's Hendrina power plant, which is next door to the mine.
(sourced Reuters)
LONDON (Reuters) - Commodities trading giant Glencore (GLEN.L) and South African partner Cyril Ramaphosa are interested in buying miner Optimum Coal Holdings (OPTJ.J) and are preparing a formal announcement, sources close to the deal said on Thursday.
Shareholders in South Africa's sixth-largest coal producer confirmed they had received an offer from the commodities giant and partner Ramaphosa, whose unlisted Shanduka Resources owns 30 percent of Shanduka Coal, a venture with Glencore.
OCH last week issued a cautionary statement, alerting investors to circumstances which could affect its share price, but has denied having been approached by any prospective buyer.
OCH, formerly owned by mining giant BHP Billiton (BLT.L), will produce 13.7 million tonnes of coal in 2011, up from 13.6 million in 2010.
"Glencore is committed to long-term investment in South Africa," one of the sources close to the deal said.
"Glencore and its partner fully recognise that Optimum has a broad-based Black Economic Empowerment ownership and is a benchmark for transformation and would not seek to prejudice Optimum's BEE credentials," the source added.
Glencore, which has $10.4 billion of cash it could spend, is considering acquisitions more aggressively because the current market turmoil has caused the price of listed assets to drop while private companies were less optimistic about their outlook.
"Is this the bottom? I don't know, but it is definitely a better time to look at acquisitions," Glencore Chief Executive Officer Ivan Glasenberg told reporters earlier on Thursday when the company's second quarter results were announced.
Shanduka Coal, 70 percent owned by Glencore, has until recently been Glencore's vehicle for investment in coal mining in South Africa.
Shanduka Coal owns 100 percent of the Graspan, Townlands, Bankfontein, Leeuwfontein and Lakeside coal mines, which were acquired between 2006-2007.
According to Glencore's website, their total run of mine production capacity is around 9 million tonnes a year.
"We have been made an offer but we haven't decided yet, our board meets on Saturday to decide one way or another," said Mandla Tshabalala of Mobu Resources Pty Limited, a minority shareholder in OCH.
"We don't want to just cash out and retire to the Bahamas, we have expertise in mining and it's not our government'a policy for junior miners to be purely silent cash investors, we want to be involved in any new entity," he added.
Asked to comment on Glencore's move to buy OCH by buying from the various entities who own stakes in it, a senior mining industry source with connections to OCH said: "the structure may not turn out to be quite as you describe it."
Earlier on Thursday OCH Chief Executive Officer Mike Teke said, when asked if he saw OCH as a target for consolidation: "We are acquisitive about being a target, I'm not sure. We see ourselves as an operating asset, as being acquisitive and looking at others as targets." [
Asked if OCH had been approached by anybody, Teke said "no."
Later in the day, asked about a Glencore bid, Teke declined to comment when asked if OCH had been approached.
"Last week we issued a cautionary and I prefer not to comment," he told Reuters.
Optimum was avidly pursued by several majority black-owned junior miners when BHP put it up for sale and some of these players remain determined to derail Glencore's bid for what was one of BHP's most prized assets.
Aside from producing export grade coal, Optimum is the key supplier of fuel to state power utility Eskom's Hendrina power plant, which is next door to the mine.
(sourced Reuters)
Thursday, August 25, 2011
Optimum Coal FY profit surges on higher output
Thu Aug 25, 2011
JOHANNESBURG (Reuters) - Optimum Coal, South Africa's sixth-largest coal producer, on Thursday reported a surge in full-year earnings, boosted by higher group production and said the outlook for the coal market remained robust.
Optimum reported diluted headline earnings per share of 201.42 cents, up from 25.08 cents the previous year. Headline EPS are the main profit gauge in South Africa and exclude certain one-time items.
"Notwithstanding various production challenges at Optimum Collieries during the year, production at Koornfontein Mines has exceeded our expectations," Chief Executive Mike Teke said in a statement.
Production of coal rose 26 percent to 13.6 million tonnes.
The company said domestic and international demand for thermal coal is expected to remain strong on the back of healthy demand from Asia and from South African power utility Eskom.
The miner said it expects Optimum Collieries to produce around 5.3-5.5 million tonnes of export coal and 5.5 million tonnes of Eskom coal in the current financial year, while Koornfontein Mines is expected to produce 1.7 million tonnes of export coal and 1 million tonnes of Eskom quality coal.
While transport remains a challenge for Optimum and other South African coal miners, logistics group Transnet is investing heavily to boost volumes on the coal line leading to the export terminal at Richards Bay.
South African coal miners exported 63 million tonnes of coal last year from the Richards Bay Coal Terminal, far below its expanded capacity of 91 million tonnes, largely due to bottlenecks on the rail line leading to the port.
Transnet has said it plans to expand capacity on the coal export line to 81 million tonnes by 2015, and is studying the possibility of freeing up some 14 million tonnes of capacity on the coal line in two to three years by moving non-coal cargo to a new line via Swaziland.
Optimum declared a special dividend of 30 cents per share.
Optimum shares are down 4.64 percent so far this year, compared with an 8.9 percent fall in Johannesburg's All-Share index.
Tuesday, August 23, 2011
Optimum Coal buys Remhoogte mine from BHP
Tuesday, 23 Aug 2011
South Africa's sixth largest coal producer Optimum Coal said that it had bought two prospecting rights from BHP Billiton Energy Coal South Africa in a move to boost its portfolio.
Optimum said it would buy from BECSA the Remhoogte prospecting rights, which have an inferred resource of around 306.5 million tonnes.
The ZAR 235 million (USD 32.6 million) acquisitions will be funded through the company's own cash resources and re financed group debt facilities.
Mr Mike Teke CEO said the acquisition gives Optimum an attractive growth opportunity. he said that "At this stage it is envisaged that Remhoogte will principally be a replacement for Optimum Colliery's export saleable production in the medium to long term, although market conditions and an improvement in export logistics could result in the development of the project being expedited.”
The company said a planned Remhoogte mine is expected to produce 2.5 million tonnes of export coal per year and an estimated 400,000 tonnes of middlings product well suitable to supply power utility Eskom's nearby Camden and Majuba power stations.
(sourced Thomson Reuters)
South Africa's sixth largest coal producer Optimum Coal said that it had bought two prospecting rights from BHP Billiton Energy Coal South Africa in a move to boost its portfolio.
Optimum said it would buy from BECSA the Remhoogte prospecting rights, which have an inferred resource of around 306.5 million tonnes.
The ZAR 235 million (USD 32.6 million) acquisitions will be funded through the company's own cash resources and re financed group debt facilities.
Mr Mike Teke CEO said the acquisition gives Optimum an attractive growth opportunity. he said that "At this stage it is envisaged that Remhoogte will principally be a replacement for Optimum Colliery's export saleable production in the medium to long term, although market conditions and an improvement in export logistics could result in the development of the project being expedited.”
The company said a planned Remhoogte mine is expected to produce 2.5 million tonnes of export coal per year and an estimated 400,000 tonnes of middlings product well suitable to supply power utility Eskom's nearby Camden and Majuba power stations.
(sourced Thomson Reuters)
Friday, August 19, 2011
Optimum Coal buys prospecting rights from BHP
Fri Aug 19, 2011
* Says buys two prospecting rights for 235 mln rand
* Says assets suitable for coal exports, Eskom supplies
JOHANNESBURG Aug 19 (Reuters) - South Africa's sixth-largest coal producer Optimum Coal said on Friday it had bought two prospecting rights from BHP Billiton Energy Coal South Africa (BECSA) in a move to boost its porfolio.
Optimum said it would buy from BECSA the Remhoogte prospecting rights, which have an inferred resource of around 306.5 million tonnes.
The 235 million rand ($32.6 million) acquisition will be funded through the company's own cash resources and re-financed group debt facilities, it said.
Chief Executive Mike Teke said the acquisition gives Optimum an attractive growth opportunity.
"At this stage it is envisaged that Remhoogte will principally be a replacement for Optimum Colliery's export saleable production in the medium to long term, although market conditions and an improvement in export logistics could result in the development of the project being expedited," Teke said in a statement.
The company said a planned Remhoogte mine is expected to produce 2.5 million tonnes of export coal per year and an estimated 400,000 tonnes of middlings product well suitable to supply power utility Eskom's nearby Camden and Majuba power stations.
The site is located near the coal rail line leading to the Richards Bay Coal Terminal, it added. ($1 = 7.207 South African Rand) (sourced Reuters)
* Says buys two prospecting rights for 235 mln rand
* Says assets suitable for coal exports, Eskom supplies
JOHANNESBURG Aug 19 (Reuters) - South Africa's sixth-largest coal producer Optimum Coal said on Friday it had bought two prospecting rights from BHP Billiton Energy Coal South Africa (BECSA) in a move to boost its porfolio.
Optimum said it would buy from BECSA the Remhoogte prospecting rights, which have an inferred resource of around 306.5 million tonnes.
The 235 million rand ($32.6 million) acquisition will be funded through the company's own cash resources and re-financed group debt facilities, it said.
Chief Executive Mike Teke said the acquisition gives Optimum an attractive growth opportunity.
"At this stage it is envisaged that Remhoogte will principally be a replacement for Optimum Colliery's export saleable production in the medium to long term, although market conditions and an improvement in export logistics could result in the development of the project being expedited," Teke said in a statement.
The company said a planned Remhoogte mine is expected to produce 2.5 million tonnes of export coal per year and an estimated 400,000 tonnes of middlings product well suitable to supply power utility Eskom's nearby Camden and Majuba power stations.
The site is located near the coal rail line leading to the Richards Bay Coal Terminal, it added. ($1 = 7.207 South African Rand) (sourced Reuters)
Wednesday, August 3, 2011
Coal miners strike ends
The wage settlement with NUM, United Association of SA (Uasa) and Solidarity, ranges between 8% and 10.5%
Wed, August03, 2011 |I-Net Bridge
Workers in the coal sector are expected to return to their posts on Tuesday after the unions and the Chamber of Mines signed a two-year wage agreement, ending an eight-day strike.
Frans Barker, negotiator on behalf of coal mines, told I-Net Bridge that the wage settlement with Nation Union of Mineworkers, United Association of SA (Uasa) and Solidarity, ranged between 8% and 10.5% in the first year. Unions will receive 7.5% and 10% in the second year.
The NUM, Uasa and Solidarity downed tools in the coal sector a little more than a week ago over salary increases.
NUM, which collectively represents 150,000 workers, and Uasa were demanding a 14% pay rise. Solidarity was demanding a 12% increase.
The coal mining companies involved are Anglo American Thermal Coal, Delmas Coal, Exxaro Coal Mpumalanga, Kangra Coal, Optimum Coal and Xstrata Coal. (Business Day)
Wed, August03, 2011 |I-Net Bridge
Workers in the coal sector are expected to return to their posts on Tuesday after the unions and the Chamber of Mines signed a two-year wage agreement, ending an eight-day strike.
Frans Barker, negotiator on behalf of coal mines, told I-Net Bridge that the wage settlement with Nation Union of Mineworkers, United Association of SA (Uasa) and Solidarity, ranged between 8% and 10.5% in the first year. Unions will receive 7.5% and 10% in the second year.
The NUM, Uasa and Solidarity downed tools in the coal sector a little more than a week ago over salary increases.
NUM, which collectively represents 150,000 workers, and Uasa were demanding a 14% pay rise. Solidarity was demanding a 12% increase.
The coal mining companies involved are Anglo American Thermal Coal, Delmas Coal, Exxaro Coal Mpumalanga, Kangra Coal, Optimum Coal and Xstrata Coal. (Business Day)
Monday, August 1, 2011
Wage talks aim to end S.Africa gold, coal strikes
Mon Aug 1, 2011
By Ed Stoddard, Reuters
JOHANNESBURG (Reuters) - Striking South African coal and gold miners will meet the Chamber of Mines in separate talks on Monday in a bid to end stoppages that have cost Africa's largest economy tens of millions of dollars in lost output.
Coal workers have been off for a week while some 100,000 gold miners downed tools on Thursday, halting operations at AngloGold Ashanti, Gold Fields and Harmony Gold at a time when bullion is at record highs.
Gold's run has been driven by its safe-haven status amid the debt crises in Europe and America but analysts have said a prolonged strike in South Africa, the fourth-largest producer of the precious metal, could also support its price.
Spot gold was fetching $1,613.44 an ounce by 0523 GMT on Monday, compared with a record high of $1,632.30 on Friday.
The index of South African gold miners shed 5.4 percent last week, on investor concern about lost output even as the commodity rallied.
But South Africa's rand and bond markets have shrugged off the strikes, which have also hit the country's fuel, chemical and diamond sectors, and the gains they have achieved could be extended this week on the gold price and technical factors.
The rand was trading 0.49 percent firmer against the dollar at 6.6620 as of 0523 GMT.
The annual "strike season" is in full swing, with unions demanding 10-15 percent pay rises, well above inflation of 5 percent. A fuel strike that caused panic buying at the pumps ended last week, but when workers go back to their jobs in one industry, labour strife flares in another.
DIFFICULT POSITION
The strikes highlight the difficult position of the ruling African National Congress, which is keen to attract foreign investment but is in a governing alliance with organised labour.
Monday's talks were due to start at 0800 GMT. Negotiators have narrowed the gap on the gold front, raising hopes of more progress, though neither side is predicting a breakthrough.
"They have put something on the table and we are looking at that and consulting with our members and will come back on Monday to see if there can be some improvements in their offer," Frans Baleni, General Secretary of the National Union of Mineworkers (NUM), told Reuters ahead of the talks.
The NUM had sought a 14 percent pay rise and the gold mine companies had offered rises of 7 to 9 percent.
A new round of talks will also seek to end the coal miners' strike. Analysts have said if it persists for at least another week exports to Asia and Europe could be disrupted.
A prolonged strike could also choke supply supply to utility Eskom , which provides almost all of South Africa's power and almost exclusively runs on coal. Eskom has said it has around five weeks of stocks.
Coal firms affected include Anglo Thermal Coal SA, Exxaro, Optimum Coal and Xstrata Coal.
Markets on Monday will also be watching wage talks between unions and Impala Platinum, the world's second largest producer of the precious metal.
Impala and its larger rival Anglo American Platinumn, which is also engaged in negotiations, together account for around two-thirds of global platinum output, so strikes against them will almost certainly support the metal's price.
Tuesday, July 26, 2011
Coal strike will test SA during big freeze on the way
Eskom, which relies on coal for most of its power generation, says the strike will only have an effect if it becomes protracted
26 July, 2011
By Alistair Anderson, Business Day
SA’s ability to manage the cold weather predicted to sweep most of the country in the next few days will be severely tested by the continuing strikes in the coal and fuel sectors.
Thousands of workers at coal companies including Xstrata, Anglo American, Exxaro Resources and Optimum Coal went on strike on Sunday evening demanding wage increases of 12%-14%.
WeatherSA yesterday warned that the snowfall over the Western Cape and Eastern Cape could reach Gauteng today. Several roads in the Eastern Cape have been closed since Sunday due to heavy snowfall.
Gauteng’s emergency services yesterday issued a warning to residents to keep warm and avoid hypothermia when the snow reached the province. But Gauteng consumers have been battling for weeks to secure gas for heaters and diesel for their generators.
This has fuelled fears that Eskom’s electricity supply may be hit by the coal strike.
Afrox , SA’s biggest supplier of liquefied petroleum gas, earlier this month said it expected to receive a consignment of imported gas at the end of the month to ease shortages. The company blamed the cold weather for the scarcity.
The coal industry strike has placed electricity supply under pressure. But Eskom, which relies on coal for most of its power generation, said the strike would have an effect only if it became protracted.
"We’ve got, on average, 38 days of coal stockpiles at the power stations," Eskom spokesman Tony Stott said yesterday.
"If the strike goes on for a long time and demand goes up due to cold weather, it would put the system under severe strain."
National Union of Mineworkers spokesman Lesiba Seshoka said yesterday that Eskom would not "be able to function" for longer than three weeks without coal miners. He warned that the strike would have "serious negative ramifications. Our members are working underground in the coal mine industry — they play the most important part in the coal chain. The entire economy depends on electricity."
WeatherSA said the intense low temperatures were expected to last at least until Thursday. With Sapa.
Thousands of workers at coal companies including Xstrata, Anglo American, Exxaro Resources and Optimum Coal went on strike on Sunday evening demanding wage increases of 12%-14%.
WeatherSA yesterday warned that the snowfall over the Western Cape and Eastern Cape could reach Gauteng today. Several roads in the Eastern Cape have been closed since Sunday due to heavy snowfall.
Gauteng’s emergency services yesterday issued a warning to residents to keep warm and avoid hypothermia when the snow reached the province. But Gauteng consumers have been battling for weeks to secure gas for heaters and diesel for their generators.
This has fuelled fears that Eskom’s electricity supply may be hit by the coal strike.
Afrox , SA’s biggest supplier of liquefied petroleum gas, earlier this month said it expected to receive a consignment of imported gas at the end of the month to ease shortages. The company blamed the cold weather for the scarcity.
The coal industry strike has placed electricity supply under pressure. But Eskom, which relies on coal for most of its power generation, said the strike would have an effect only if it became protracted.
"We’ve got, on average, 38 days of coal stockpiles at the power stations," Eskom spokesman Tony Stott said yesterday.
"If the strike goes on for a long time and demand goes up due to cold weather, it would put the system under severe strain."
National Union of Mineworkers spokesman Lesiba Seshoka said yesterday that Eskom would not "be able to function" for longer than three weeks without coal miners. He warned that the strike would have "serious negative ramifications. Our members are working underground in the coal mine industry — they play the most important part in the coal chain. The entire economy depends on electricity."
WeatherSA said the intense low temperatures were expected to last at least until Thursday. With Sapa.
Monday, July 25, 2011
South Africa coal miners start strike
Mon Jul 25, 2011
* Eskom sees no immediate impact from coal strike
* Above inflation wage deals hurting economy, analysts
By Agnieszka Flak and Olivia Kumwenda
JOHANNESBURG, July 25 - Tens of thousands of South African coal workers went on strike on Monday seeking inflation-busting 14 percent wage increases, but power utility Eskom said the
stoppage would not have an immediate impact on plants providing electricity to Africa's largest economy.
Hundreds of thousands of workers across the country have downed tools in recent weeks, or are threatening to do so, seeking raises double or triple the 5 percent inflation rate in the mid-year bargaining session known locally as "strike season".
State-run Eskom , which relies on coal for most of its power generation, said the latest strike would only have an impact if it became protracted.
"We've got on average 38 days of coal stockpiles at the power stations," spokesman Tony Stott said.
Lesiba Seshoka, spokesman for the powerful National Union of Mineworkers (NUM), said about 150,000 were on strike and employers have offered pay rises of 7 to 8.5 percent.
The chamber of mines said there are about 30,000 unionised workers in the coal sector and it was unclear how many were striking.
Employers over the past two years have struck wage deals averaging about 8 percent with many firms seeing the above-inflation settlements as a necessary cost of doing business in South Africa. They have also slashed jobs over the period to make up for the higher personnel costs.
Independent coal analyst Xavier Prevost said: "If there is no compromise and they continue like this, it's going to be serious and the damage to the economy will be big."
"If we don't produce coal, the first to be affected will be exports. Our (export) stockpiles will probably not last longer than 15 days".
The Richards Bay Coal Terminal, which ships most of South Africa's coal abroad, said stocks stood at a healthy 2.99 million tonnes at the end of June.
Eskom has been under pressure to build new plants to avoid a repeat of the power shortage that brought the economy to its knees in 2008, forcing mines to shut down for days and costing
the country billions of dollars in lost output.
It plans steep increases in electricity prices to pay for much-needed new power stations, adding to inflationary pressures and taking more money out of middle-class paychecks.
But Eskom is facing political pressure to settle with workers. The country's ruling African National Congress is allied with organised labour and wants to placate its millions of voters.
The Chamber of Mines is negotiating on behalf of several coal mining groups, including Anglo Thermal Coal SA , Exxaro , Optimum Coal and Xstrata Coal.
Read more
Why Coal Prices Will Soar in the Coming Years
Lontoh Coal Limited of South Africa has planned to open up China’s market
Coal prices area at US$ 120 a tonne
Mozambi Coal to acquire Mozambican coal concession
Newcastle steam coal price rises by 1pct
S.Africa's June coal exports rise to 4.78 mln T
Coal of Africa shares up almost 20%
* Eskom sees no immediate impact from coal strike
* Above inflation wage deals hurting economy, analysts
By Agnieszka Flak and Olivia Kumwenda
JOHANNESBURG, July 25 - Tens of thousands of South African coal workers went on strike on Monday seeking inflation-busting 14 percent wage increases, but power utility Eskom said the
stoppage would not have an immediate impact on plants providing electricity to Africa's largest economy.
Hundreds of thousands of workers across the country have downed tools in recent weeks, or are threatening to do so, seeking raises double or triple the 5 percent inflation rate in the mid-year bargaining session known locally as "strike season".
State-run Eskom , which relies on coal for most of its power generation, said the latest strike would only have an impact if it became protracted.
"We've got on average 38 days of coal stockpiles at the power stations," spokesman Tony Stott said.
Lesiba Seshoka, spokesman for the powerful National Union of Mineworkers (NUM), said about 150,000 were on strike and employers have offered pay rises of 7 to 8.5 percent.
The chamber of mines said there are about 30,000 unionised workers in the coal sector and it was unclear how many were striking.
Employers over the past two years have struck wage deals averaging about 8 percent with many firms seeing the above-inflation settlements as a necessary cost of doing business in South Africa. They have also slashed jobs over the period to make up for the higher personnel costs.
Independent coal analyst Xavier Prevost said: "If there is no compromise and they continue like this, it's going to be serious and the damage to the economy will be big."
"If we don't produce coal, the first to be affected will be exports. Our (export) stockpiles will probably not last longer than 15 days".
The Richards Bay Coal Terminal, which ships most of South Africa's coal abroad, said stocks stood at a healthy 2.99 million tonnes at the end of June.
Eskom has been under pressure to build new plants to avoid a repeat of the power shortage that brought the economy to its knees in 2008, forcing mines to shut down for days and costing
the country billions of dollars in lost output.
It plans steep increases in electricity prices to pay for much-needed new power stations, adding to inflationary pressures and taking more money out of middle-class paychecks.
But Eskom is facing political pressure to settle with workers. The country's ruling African National Congress is allied with organised labour and wants to placate its millions of voters.
The Chamber of Mines is negotiating on behalf of several coal mining groups, including Anglo Thermal Coal SA , Exxaro , Optimum Coal and Xstrata Coal.
Read more
Why Coal Prices Will Soar in the Coming Years
Lontoh Coal Limited of South Africa has planned to open up China’s market
Coal prices area at US$ 120 a tonne
Mozambi Coal to acquire Mozambican coal concession
Newcastle steam coal price rises by 1pct
S.Africa's June coal exports rise to 4.78 mln T
Coal of Africa shares up almost 20%
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