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CityPress - - Business - DEWALD VAN RENS­BURG and SU­SAN COM­RIE dewald.vrens­burg@city­press.co.za su­san.com­rie@city­press.co.za

onku­l­uleko Nyem­bezi-Heita, chair of the JSE and for­mer CEO of ArcelorMit­tal SA, is the ma­jor mover and shaker in the frag­mented world of South Africa’s emerg­ing coal min­ing com­pa­nies.

Since early last year, she has been at the head of Ichor Coal, a Nether­lands-reg­is­tered, Ger­man-listed and now Johannesburg-based group try­ing to cob­ble to­gether a 20 mil­lion-ton-a-year coal group largely fo­cused on Eskom con­tracts.

At 20 mil­lion tons a year, the rel­a­tively ob­scure Ichor Coal could soon ri­val the likes of Exxaro as Eskom’s big­gest sup­plier.

To date, the com­pany has spent “just over R1 bil­lion” on buy­ing coal as­sets in South Africa, Nyem­bezi-Heita told City Press this week.

Most of that was spent on buy­ing as­sets from the lit­tle­known Mbuyelo Group, founded by Rirhandzu Owner Siweya.

The spree has rapidly made Ichor the golden thread be­tween a large chunk of Eskom’s coal sup­plier list.

Be­fore 1994, Eskom’s coal sup­plier list com­prised es­tab­lished min­ing com­pa­nies, sup­ply­ing Eskom on costplus and fixed-price con­tracts.

In the midst of the load shed­ding cri­sis, Eskom started sourc­ing new coal sup­pli­ers and, start­ing in 2009, a flurry of medium- and short-term con­tracts were signed – some of these con­tracts went to es­tab­lished play­ers, but many were signed with smaller mines and so-called value-adding traders.

City Press this week re­ceived the latest list of Eskom coal con­tracts af­ter an ap­pli­ca­tion in terms of the Pro­mo­tion of Ac­cess to In­for­ma­tion Act.

Half of the 33 con­tracts are with the five ma­jor com­pa­nies and make up 80% or so of an­nual pur­chases by vol­ume: Exxaro, An­glo Amer­i­can, BHP Bil­li­ton (South32) and Glen­core.

The list also con­firms that the Gupta fam­ily-owned com­pany Tegeta Ex­plo­ration and Re­sources re­ceived a con­tract to start sup­ply­ing Eskom in April.

Of the 16 smaller medium-term con­tracts that Eskom is­sued be­tween 2009 and 2015, 11 are tied to the three in­ter­linked coal in­vestors: Siweya, Mo­jalefa Land­lord Mbethe and Pius Mok­gokong.

Mbethe is largely known for hav­ing a 16.67% hold­ing in Im­pe­rial Crown Trad­ing 239, the com­pany that snatched a stake in the Sishen iron ore mine from Kumba.

Mbethe and Mok­gokong are co-di­rec­tors in Liketh In­vest­ments – the only Eskom sup­plier that does not have any mines reg­is­tered un­der its name.

Liketh has two con­tracts with Eskom – one signed in 2009 and one in 2011.

“Eskom is very care­ful not to cre­ate a sec­ondary mar­ket wherein traders or bro­kers sim­ply act as ven­dors and there is no value-add. This would even­tu­ally only add cost, but no value,” Eskom said last week.

Mbethe and Mok­gokong crossed paths with Sewiya in the mid-2000s, when the three men ac­quired the min­ing rights for the no­to­ri­ous Usutu coal mine.

Usutu was de­vel­oped on the doorstep of Cam­den Power Sta­tion in Mpumalanga, but in 2007 Eskom was in­cred­u­lous when it dis­cov­ered that its ap­pli­ca­tion for new or­der min­ing rights had been ac­quired out from un­der it by Vunene Min­ing, owned by Sewiya, Mbethe and Mok­gokong.

Vunene ended up ex­port­ing Usutu’s coal, while Eskom was forced to truck in coal for use at Cam­den from else­where.

The fight be­tween Eskom and Vunene was re­solved af­ter Ichor bought a 74% stake in Vunene. Sewiya, Mbethe and Mok­gokong have since re­signed from Vunene.

Sewiya ap­pears to have prof­ited hand­somely off flip­ping min­ing rights in this man­ner.

His com­pany web­site boasts how, in 2004, “Mr Siweya and his crew went on a mis­sion to ap­ply for as many min­ing rights as pos­si­ble – even those that were deemed ‘far-fetched’ as they in­ter­sected por­tions be­long­ing to some well-es­tab­lished min­ing houses”.

Sewiya de­scribes how he and his then fiancée sat in in­ter­net cafés and “unceas­ingly ap­plied for prospect­ing rights” – “a sat­is­fac­tory num­ber of min­ing rights were caught in the net, although many fell through”, his web­site says.

The re­sult­ing com­pany, Mbuyelo Coal, has made Sewiya a ma­jor player in the coal in­dus­try, as Ichor moved in and bought sub­stan­tial stakes in many of Sewiya’s com­pa­nies.

This is set to in­crease as the Medupi and Kusile power sta­tions, in Lim­popo and Mpumalanga, re­spec­tively, come online, cre­at­ing a “coal gap”, which Eskom wants to fill with ma­jor­ity black-owned sup­pli­ers.

Un­til re­cently, Eskom was the poor cousin of the coal mar­ket, with far bet­ter prices avail­able in the ex­port mar­ket and all pro­duc­ers jock­ey­ing for the lim­ited al­lo­ca­tions at the Richards Bay Coal Ter­mi­nal.

The pref­er­ence for ex­ports had be­come a ma­jor con­cern for gov­ern­ment, lead­ing to pro­pos­als to de­clare coal strate­gic and force dis­counted lo­cal sales.

This dy­namic has now com­pletely re­versed be­cause of plum­met­ing in­ter­na­tional coal prices.

The World Bank fore­casts that coal prices will stay be­low their 2014 lev­els un­til about 2023.

Nyem­bezi-Heita de­scribed the coal sec­tor as hav­ing a miss­ing mid­dle.

“We have the top five, then noth­ing, then the minions. We want to fill that gap,” she said.

While mak­ing sure to ac­quire ex­port al­lo­ca­tions for fu­ture use, Ichor is mostly Eskom fo­cused.

That’s the selling point – as long as the op­tion to ex­port is open if and when prices re­cover.

Ichor’s ma­jor share­holder, Sapinda, is con­trolled by Lars Windhorst, a Ger­man celebrity busi­ness­man cel­e­brated in his youth as a “wun­derkind”, launch­ing suc­cess­ful en­ter­prises in his teens and, ac­cord­ing to leg­end, trad­ing stocks long be­fore that.

He was meant to join the Ichor board last year, along with the ap­point­ment of Nyem­bezi-Heita, but the plan was canned.

But still hav­ing Mbuyelo as a part­ner also means that a

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