For the second year in a row, Keaton Energy’s Vaalkrantz colliery dragged its profits down, so the decision to dispose of it should benefit future earnings.In the 2015 financial year, Keaton uncovered R24.7m of stock theft at Vaalkrantz and took a R56.5m write-down because of challenging geology and depressed coal prices. In the year to March 2016, Vaalkrantz was unable to mine some areas because of the drought and has subsequently been put on care and maintenance. It made an operating loss of R138.9m before depreciation, against the R620.2m operating profit posted by Vanggatfontein, which is Keaton’s large, long-life mine supplying Eskom.Once the regulators approve Vaalkrantz’s sale to Bayete Energy Resources, Keaton’s management can focus on Vanggatfontein, which has been a consistent performer, CEO Mandi Glad says. It sold 2.3Mt of coal to Eskom in the past year, 2% less than in 2015 (which was a record year).Though there is more risk in a company that has only one asset, Vanggat...
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