Say what you want about Eskom, the supply of coal to the power utility remains one of the more solid business cases in South African mining. There’s little risk of oversupply. Eskom reckons it needs 4bn tons of thermal quality coal between now and 2040 of which about half is not yet contracted.
So it’s no coincidence Firestone Energy, JSE-listed, is f ighting off a takeover proposal by Australians Range River Gold – an offer it deems opportunistic (it is) and that doesn’t pay the Firestone shareholders for the strategic nature of the Waterberg Joint Venture. The Waterberg Joint Venture is a thermal coal mine in Limpopo province. Another is Boikara- belo owned by Resource Generation.
Like Firestone Energy, Resource Generation (Resgen) is primarily listed in Australia, but has a secondary Johannesburg presence.
What’s interesting about Resgen is that it’s f inally raised f inance – about $123m – for Boikarabelo, a proposed 6Mtpa mine of which half will be sold to Eskom.
The rest is being supplied to Noble Group, a Singapore-based trading house that provided the loan and which could trigger the additional $300m in loans required to fully fund Boikarabelo.
Paul Jury, MD of Resgen, likens it to a “who blinks f irst” Western moment. With the initial f inance in for Boikara-