Johannesburg, South Africa — MININGREVIEW.COM — 30 October 2008 – Strategic Natural Resources (SNR) – a junior resources company formed to exploit strategic energy-based demands in South Africa – has announced that its 74% owned subsidiary, Elitheni Coal has signed its first major commercial coal supply agreement with Indwe Power (IPPL) – an indirect subsidiary of AIM and JSE-listed Independent Power Southern Africa (IPSA).
A media release issued here said Elitheni would supply approximately one million tonnes per annum over the next 25 years to IPPL, which was to establish a 250MW electrical power plant adjacent to the mine mouth of Elitheni’s coal mine at Indwe, in the Eastern Cape.
It added that IPPL was actively considering establishing additional independent power stations in the East London area of up to 1 000 MW capacity. Both parties were in the process of negotiating a framework agreement similar to the one announced today for the supply of the additional coal to IPSA’s new power stations.
SNR chief operations officer David Nel commented: “The very low sulphur content of Elitheni’s coal and it’s low volatile content will make the IPSA power stations the cleanest coal-fired heat and power generation facilities in South Africa.”
Although SNR coal will be used mainly as fuel for primary energy supply, it can be used as a reducing agent in the metallurgical industry, an additive and primary energy source in the brick-making industry, and also as fuel for domestic consumption.
In its announcement of interim results last week, SNR said that the group had made a profit during the six month period to end August 2008 as a result of the sale of a 26% interest in Elitheni Coal to its broad-based black economic empowerment partners, Vuwa Investments and Mr Masizi Msutu.
The reported profit after tax and minority interests is £4.1 million compared to a loss of £314 000 during the same period last year. The group reported earnings per share of 6.37p in contrast to a loss of 0.57p per share over the corresponding period last year. The headline loss per share, which excludes the once-off gain, was 0.29p per share.