Vuslat Bayoglu, MD and co-founder of South Africa-focused mining investment business Menar, has proven himself an astute businessman.
He has been extremely successful in monetising his company in a short space of time having developed an eye for identifying promising opportunities in the mining sector and converting them into profitably businesses.
And unlike the majority of the investment market, he believes the country’s prospects for a bright future are plentiful, writes LAURA CORNISH.
This article first appeared in Mining Review Africa Issue 1, 2019
Considering Bayoglu (a mechanical engineer by profession) had no formal mining training or experience before moving to South Africa in 2002, it is impressive how quickly he has become a recognised force and face in the sector.
This can be attributed to his love for the country and his ability to identify a great opportunity and thereafter maximise on delivering it. The follow-through in reinvesting the cash generated back into Menar and its companies has been a key contributor to building such a large-scale business in such a short space of time.
For example – in the space of 15 years since establishing Menar, Bayoglu has built Canyon Coal, one of South Africa’s largest coal mining and processing companies. Menar is a 50% owner of the majority shareholder in Canyon Coal.
The company has also made a number of strategic acquisitions in recent years to further grow its coal production and project pipeline as well as expand into other key commodities. And it remains active in continuing this momentum moving into 2019 and beyond.
Based on Menar’s success to date, it is clear the MD shows favour with the South African mining sector – a unique attribute in the current climate and a noteworthy attribute considering his family roots lie in Turkey where he was born.
Only a man with true love and belief in the country in which he now resides could be equated to the achievements he has celebrated together with the team he has put in place to support him.
He believes that the general negative consensus towards South Africa is destructively influencing the global world’s perception of the country and residents’ ability to build on the opportunities it offers.
“South Africa should be celebrated for its positive opportunities. The legal system works, it has great infrastructure and the regulatory bodies follow the processes. Granting a mining licence demonstrates this perfectly, by way of example, where the United States or Canada can take up to 10 years to award a mining right. The process in South Africa take less than two years.”
“Our government and in particular our mining minister Gwede Mantashe is pro mining and wants to build the industry to create employment opportunities. He is an all-rounder – with a sound understanding that if the mining sector is profitable it will lead to job creation, which Mantashe is so passionate about. He is a remarkable leader and by far the best mining minister this country has seen.”
And so, on the back of a confident outlook for the country and an even more confident outlook on the role coal will play in the future, Bayoglu is moving forward with his growth aspirations secure and ready. Canyon Coal as mentioned is looking to expand its run-of-mine (ROM) production significantly. Considering its project delivery track record to date, this seems a realistic objective.
Fossil fuels, and primarily coal, may be declining in first world countries such as Europe, but remaining a driving force behind GDP growth in China and India, over and above South Africa.
“We have 118 years of proven coal resources at the current pace of production left in South Africa and Canyon intends to maximise on this opportunity, which is significant considering there is very little investment coming from any other mining houses. The reality is, the world will experience a coal deficit, to the tune of some 75 Mtpa in the near-term future and Canyon Coal will benefit from focusing on supplying into this shortfall market.”
The plan more specifically is to grow Canyon’s ROM coal production from 11 Mpta to 20 Mpta by 2020. This would equate to around 13 Mtpa of saleable coal which positions Canyon Coal alone not far behind South32 in term of production. In combination with the addition of new projects across the Menar stable, the company expects to grow its employment headcount from about 3 700 people at present to around 7 500 people in the next two years.
Menar owns the Zululand Anthracite Colliery (ZAC), Kangra Coal and has an agreement to develop Riversdale Anthracite Colliery– and all have outlined growth strategies of their own in place.
Through Menar’s majority owned exploration and project development mining company Sitatunga, it also owns the Leeuw Braakfontein coal project (renamed Zimpande) which it acquired from Wescoal as well as the East Manganese project in the Northern Cape.
Sitatunga purchased the East Manganese project from Southern Ambition near the manganese-rich town of Hotazel. The deal, which was signed on 28 August, saw Menar lay its hands on a mineral resource other than coal for the first time.
Arne Hansen, the MD of Sitatunga, said the purchase of East Manganese was part of a strategy to build a manganese portfolio in the Northern Cape. Mining operations will start in 2019.
Expansion into the manganese sector had been long coming and forms part of a greater strategy for Menar to grow and diversify its geographical location of its coal assets in South Africa. “Our in-house technical team completes on average one due diligence every month on potential projects/assets to acquire. I am particularly in favour of bulk commodities such as chrome and may look to secure a copper project in 2019,” Bayoglu reveals.
“Today I am proudly South African and proud of the mining businesses I am building and growing – it represents positive change and economic improvement for the country and more businesses should operate with a similar outlook and philosophy. The mining sector is so critical to our GDP and investor perception,” he concludes.