Majority black owned, South Africa-focused coal miner Wescoal has redefined the term ‘turnaround’ within the mining industry.
In the space of just three years the company has transitioned from a struggling entity into a profit-making business and is quickly becoming a powerful force within the coal mining sector.
This article first appeared in Mining Review Africa Issue 12, 2018
This can undoubtedly be attributed to CEO WAHEED SULAIMAN and his current management team that together have delivered a strong coal mining business despite encountering numerous adversities - and is now perfectly positioned to become an even stronger leader in the sector, writes LAURA CORNISH.
Wescoal’s financial status – which has improved significantly year-on-year since Sulaiman and his executive team took over the reins of the company – is testimony to the success this company has achieved in an incredibly short space of time.
But few may appreciate the CEO’s career path, personal strengths and passions that in fact prepared and enabled him to achieve the successes he has at Wescoal.
Unlike many CEOs in the mining industry, Sulaiman is an all-rounder, and well balanced in terms of his technical and business skills sets.
He has a BSc Chemical Engineering degree from the University of Cape Town and a BCom degree from the University of South Africa.
And it is the combination of both skills sets, well refined over his career, that he has injected with equal priority into the business to deliver a financially and operationally resilient Wescoal.
He joined the company in February 2015 as commercial and strategy director, responsible for the development and implementation of long-term strategies while heading up the risk, compliance and business development portfolios of the mining and trading divisions.
But an unexpected exit of Andre Bojé, the CEO at the time, saw Sulaiman positioned as CEO two months after joining the company.
In hindsight, this was a plus for the company as he fast tracked the company’s transformation with near perfection - delivering a new and fresh-faced Wescoal – a company that achieves its deliverables and is moving into the future with promising prospects.
Sulaiman’s choice to follow an engineering career is thanks to his love of “building things” which works well in a sector that requires this passion to bring mining projects to fruition.
Prior to joining the company however, he worked in various roles at Dow Chemicals and then BHP Billiton, handling assignments in South Africa, Chile, Turkey and Australia – which included conceptualising, designing and commercialising various technologies.
But his real love lies in developing strategies from a business development context, which took him out of the field and into the BHP corporate environment.
“Overcoming challenges and in so doing learning and growing as an individual is what really drives me and I subsequently thrived in this environment.”
Sulaiman consequently developed a range of skills sets at BHP (initially for the manganese business) which included providing corporate financial advice, managing the day-to-day operational requirements of the business, concluding acquisitions and making strategic decisions about growing the business – in Africa and Gabon specifically, where he spent considerable time negotiating with port and rail operators in the country.
On the back of his multiple successes, he was asked to join the company’s coal division as business development lead, providing capital project management and overseeing the disposal of non-core assets.
“They needed a sustainable business model and also had to close out major BEE transactions which allowed me to establish my first connections with the Department of Mineral Resources and Eskom.”
Sulaiman soon became part of the leadership team; developing strategies, reviewing capital projects and setting up joint ventures. The business went through a right sizing exercise which ultimately led to the South32 spin-off.
“Working within a large-scale business such as BHP, I was given the flexibility and freedom to build up a widespread set of skills across multiple areas which I believe primed me well to deliver on the objectives Wescoal needed me to inject into revitalising the business,” Sulaiman highlights.
When non-executive chairman of the board Robinson Ramaite approach Sulaiman to join the company, it was a “no brainer” for him.
“BHP Billiton’s coal division was a maturing business and I needed to apply my skills to a new business which would offer new challenges and opportunities.”
"Ramaite wanted me to learn the business and then implement strategies to corporatize it beyond a family-owned business by implementing world-class systems and in doing so grow the company.”
And his opportunity to do so came quicker than expected, replacing Bojé as acting CEO in April 2015, just two months after joining the company.
A lot of structural changes took place thereafter, including the appointment of Izak van der Walk into the position of CFO, a new head of human resources as well as a new legal head and investor relations team.
With no official handover, Sulaiman and his team were swimming in the deep end but they conquered every challenge, focusing heavily on cash and cost management while looking to build a solid coal mining platform.
It took the team only a year to stabilise the business, and thereafter continuously deliver milestone achievement after milestone achievement, which included:
- bringing its flagship Elandspruit into production (funded largely by the trading arm of the business) and thereafter concluding a long-term contract agreement with Eskom for coal supply for the mine;
- securing a water use licence at Intibane which enabled stable production performance (with a short lifespan this mine has subsequently been sold);
- securing a water use licence for the Khanyisa colliery which enabled coal production thereafter;
- concluding agreements to supply coal into the export markets;
- securing a +51% black ownership structure;
- acquiring Keaton Energy which expanded its production profile;
- securing long-term debt funding with Nedbank and most recently;
- entering into a consortium agreement to acquire Universal Coal.
This number of achievements for a small-scale mining company is enormous and the company is quickly positioning itself as a consolidator within the South African junior coal mining space.
“We have been creative in our approach to building the business as quickly and effectively as possible but are still incredibly careful in how we spend our money. I feel privileged in achieving so much at the company on the back of all my learnings at BHP,” Sulaiman enthuses.
Should the consortium successfully acquire Universal Coal, Wescoal will add fuel to its transformational position in the sector – with even more operational flexibility and additional revenue streams to build an even greater business.
“We’ve built up a strong track record and reputation of over delivering. Our empowerment credentials have given us an edge over our competitors and we’re determined to climb beyond the 8 Mtpa production mark we currently sit at.
"And we are confident of achieving this within the next three years. The Moabsveldon asset will further contribute to this objective, alongside looking at how best to exploit our 300 Mt of coal resource and 100 Mt of reserves.”
Having corporatised the company, realigned its culture, improved its operating model and de-risked the business, Sulaiman and his team are now also working hard on:
- Building a diversified management team – particularly with regards to gender equality
- Bringing on board an asset that offers a +10-year lifespan
- Generating more cash to fund the growth strategy
- Expand the reserve base at Vanggatfontein
- Bringing Moabsveldon into production – in about 18 months’ time
- Conclude the acquisition of Universal Coal (as part of the consortium)
“Fundraising in the South African coal space remains a challenge but we are problem solvers and are confident that we can deliver significant growth in the next three years.
"It's enormously rewarding to build something from a low level and consistently improve, all within the context maintain our position and status a fully compliant, majority black-owned business. So watch this space, we are ready to deliver even greater achievements in the near future.”