The decision was undertaken in partnership with Witbank Mineral Resources (WMR), the company Keaton Energy appointed to manage its wholly owned subsidiary Leeuw Mining and Exploration (LME) and in turn Vaalkrantz.
The decision was not taken easily – Keaton Energy says continuous efforts were made 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.
LME has also embarked on a Section 189A process for the retrenchment of all employees and is currently in consultation with all relevant stakeholders.
Keaton Energy is also in the processing of selling the colliery through a sale of shares and claims agreement arrangement with Bayete Energy Resources (BER) which it announced in February this year.
There are still a number of suspensive conditions which have to be met for the sale to become effective, including Section 11 consent from the Minister of Mineral Resources in terms of the Mineral Petroleum and Resources Development Act, 28 of 2002 (MPRDA).
At the time, Keaton Energy simultaneously entered into a management agreement with WMR, a related party to BER for the management of LME up to and until the sale of shares and claims agreement with BER becomes unconditional.