| Work Detail |
Wescoal has placed the Vanggatfontein Colliery on care and maintenance as it is unsure how long Eskom will take to renew its coal supply agreement. The colliery located in Delmas, Mpumalanga is one of the mining assets taken over by Wescoal when it acquired the entire issued share capital of Keaton Energy Limited in 2017. Coal produced at the mine was supplied to Eskom Holdings under the terms of a ten-year coal supply agreement due to expire at the end of April 2022. While the agreement expiry date is 30 April 2022 the energy component has already been exhausted, with 300,000 tonnes of coal currently stockpiled at the mine. In a Johannesburg Stock Exchange SENS announcement last week Wescoal said discussions with Eskom about the agreement, which requires the entire Vanggatfontein Colliery’s (VGF) resources to be dedicated solely to the power utility, “have not materialised as at the date of this announcement”. Placing the mine on a care and maintenance schedule is in an effort to save overhead costs and capital expenditure. Wescoal said they would continue to engage the utility to find a solution that could save jobs and the economy of the Victor-Khanye Municipalities (VKLM). VGF has a remaining life of mine of more than 6 years with reserves of more than 15 million tonnes. “The immediate plan regarding the run-of-mine stockpile is to process the coal and supply into the domestic and export market,” read the Wescoal announcement. Direct Wescoal employees working at the mine would be accommodated in various roles within the group while management assesses alternative options and continues to engage with Eskom. The washing plants at VGF would be used to process coal from Moabsvelden mine, which would save the neighbouring colliery capital requirements in the short term. “Wescoal will be engaging with all affected and interested stakeholders in this regard, including inter alia, VKLM, the Department of Mineral Resources and Energy, the Department of Labour, community representatives and labour union formations. Engagements with lenders and all internal stakeholders will also be taking place to manage this transition,” the announcement stated. |
