HomeNewsKeaton Energy still awaiting Section 11 approval for KZN asset sale

Keaton Energy still awaiting Section 11 approval for KZN asset sale

Earlier this year Keaton Energy announced that it would sell its KZN assets, with the exception of the Braakfontein project, to Bayete Energy Resources (BER).

There are still a number of suspensive conditions which have to be met for the sale to become effective, including the Section 11 consent from the Minister of Mineral Resources in terms of the Mineral Petroleum and Resources Development Act, 28 of 2002.

Simultaneously with the sale, Keaton entered into a management agreement with Witbank Mineral Resources (WMR), a related party to BER, for the management of Leeuw Mining and Exploration (LME) up to and until the Sale of Shares and Claims Agreement with BER becomes unconditional.

Notwithstanding continuous efforts by both LME and WMR to minimise losses exacerbated by the on-going global decline in coal prices, force majeure declared on LME by its biggest customer and the unavailability of water due to the continued drought in the region, Keaton and WMR jointly decided to place the KZN-based Vaalkrantz colliery on care and maintenance with effect from 1 May 2016.

Vanggatfontein delivers

The KZN sales announced was made as part of Keaton Energy’s quarterly production update for the quarter ended 30 June 2016 (Q1, FY17).

The quarter was characterised by continued stable operations at Vanggatfontein the company notes.

Production at Vanggatfontein colliery was as per plan and in-line with the comparable quarter in FY16 with 574 536 t of washed 2- and 4- Seam thermal coal being delivered to Eskom (Q1 FY16 : 617 413 t).

This 7% decrease over the comparable period was due to working out the remnant portion of Pit 2 with its lower yielding coal and crossing a dyke structure. Mining has now been completed in these low-yielding areas.

5-Seam metallurgical coal sales into the domestic market during the quarter decreased 43% to 15 103 t (Q1 FY16: 26 548t) in line with the geological model.

Discard and slurry sales totalled 69 734 t (Q1 FY16: 2 957 t) as new markets were developed.

“Vanggatfontein continues to perform consistently both in terms of production and financial criteria. The continuing solid performance provides the basis for the coming expansion with the Moabsvelden project and the growth of the streamlined Keaton group,” says Keaton Energy CEO Mandi Glad.