Wescoal resolves Vanggatfontein dispute

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Wescoal resolves Vanggatfontein dispute

Published Date: 2019-05-22 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Wescoal resolves Vanggatfontein dispute

The coal producer expects the mine to return to full production early next month, two weeks ahead of schedule.

Wescoal says all coal mining and processing activities have resumed at its Vanggatfontein mine just a month after it issued Eskom with a force majeure notice after the mining contractor at the mine, situated outside Delmas in Mpumalanga, fired all its workers.

The coal producer said following negotiations between the mining contractor and the majority union at the mine, the downtime had been lifted. It had expected production to remain suspended for six to eight week while it hired new employees, reducing the mine's annual budgeted production by between 15% and 20%. Now it expects the ramp-up to full production to be achieved early next month, two weeks ahead of schedule. Last year, Eskom accounted for more than 95% of the colliery's sales of 2.34 million tons.

The group said it had also entered into a deal to buy out some minority interests in Neosho, the owner of the Moabsvelden Project, in which it holds a 74% stake. It's increasing that by a further 18.2% through the R24.5 million transaction and is in ongoing discussions with the remaining minority shareholder to acquire the outstanding 7.8% interest in Neosho.

Moabsvelden is close to the Vanggatfontein mine and is a 47.8 million ton resources, which Wescoal believes has the potential to be developed into a 1.5 million to 2 million ton a year operation. It said there was capacity for the coal produced at the mine to be processed at facilities at Vanggatfontein or to be sold directly. It said it was in talks with potential customers for the coal, including Eskom.

Wescoal's shares closed 4.8% higher at R1.32 yesterday. The announcements were made after the close of trade.





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