Wescoal CEO, Waheed Sulaiman, says the group is on track to become a leader in its field with the short to medium term objective of 8 Mtpa in sight.
“We will continue to return capital to shareholders through dividends or share buy-backs with the company generating good cash flows. “
He says the Keaton integration costs are in line with expectations from rationalising human resources to optimising mining operations and projects in aligning with Wescoal group policies and procedures which include financial reporting.
“Immediate cost savings or low hanging fruit have been identified in Keaton and we have acted on these to realise cost savings during the current financial year.
“Strong cash flows are allowing us to repay expensive short term debt and enter into more efficient long term debt structures while paying dividends.
“Long term debt funding from banks is evidence that traditionally conservative financial institutions see and buy into the Wescoal value proposition.”
Sulaiman highlights the importance of the recently acquired Keaton assets.
“Vanggatfontein colliery, located near the town of Demas in Mpumalanga, produces coal for supply to Eskom and domestic industrial consumers.
“Production from the mine and other Keaton assets are in line with budget and the operations are stable as they are integrated into our operation.
“In addition project development work at Moabsvelden is progressing as a short-term priority and we hope to complete this in Q3 of FY17.”
He points to transformation at the centre of the company’s employment and ownership principles.
“In keeping with the company’s 51% minimum black ownership, its enlarged shareholder base is now well above this figure.
“In addition, a broad-based ownership scheme involving employees is planned for implementation which is likely to further enhance BEE ownership. “
Wescoal’s total spend on local economic development (LED) initiatives is approximately R5,33 million for the past year.
Corporate social investment spend has also been a key focus of the company’s social responsibility programme of around R1,432 million with a total community upliftment investment of R6,761 million.
“It is the company’s intent to maintain or improve the percentage in relation to our profitability or revenue growth in time.
“In addition some R1.9 million has been allocated to enterprise development where we intend translating entrepreneurial potential into sustainable businesses capable of fitting into the Wescoal supply chain or be positioned to operate independently in a sustainable manner.
“We continue to progress on realising our employment equity and diversification plans and have been successful in recruiting two senior managers from designated groups as well as appointing a black CEO for the mining business.
“Our internal talent management programs and strengthening of the senior management and executive team has allowed us to fill the vacant CFO post with an internally chosen candidate… an approach that positions us well to take advantage of growth opportunities,” explains Sulaiman.
“In going forward we intend playing a significant role in consolidation in the coal mining space, but only in a value adding, sustainable way.
“Our broader asset base augurs well for the future and this is getting recognition in the marketplace regarding share value from among others, share analyst companies.”
Sulaiman says that the company maintains a high level of interaction with all its stakeholders from shareholders and communities to the media and concludes by inviting potential investors to visit the newly acquired and existing operations in the Delmas and Middleburg areas.
All images: Wescoal