Picture: BLOOMBERG
Picture: BLOOMBERG

State-owned diamond miner Alexkor will invest in a coal-washing plant in the Witbank-Middelburg area and use its relationship with Eskom to get a coal-supply agreement, acting CEO Vimal Bansi said in the company’s latest annual report.

Alexkor has battled to make profits from its on-and offshore licence area in the Northern Cape, which is now operated as a pool-and-share joint venture after a settlement agreement with the local Richtersveld community several years ago. It has been looking for other options to diversify activities.

Alexkor was negotiating with the owners of the coal plant who were keen to enter into a joint venture, Bansi said on Monday.

It was taking all steps to ensure the business model satisfied the Public Finance Management Act and Treasury regulations. Coal would be sourced from junior emerging miners.

Alexkor had commissioned a diamond cutting and polishing minifactory in Houghton and would open another in Alexander Bay, he said.

In the year to March, the pool-and-share joint venture produced four times as many carats, at 162,172, as it did in 2016, most of which were mined by a contractor, International Mining and Dredging SA (IMDSA). After a R25.1m transfer from the government, Alexkor made a profit of R6m.

Alexkor may need up to R9.5m to fund its operations in 2017, partly because a fire on IMDSA’s vessel in April will cut production. It will try to secure other mining contracts.

Alexkor had enough cash to sustain itself for the remainder of its financial year, Bansi said.

The company has a legacy environmental liability estimated at R259m at the end of March. It spent only R116,667 on addressing it in the year under review.

Bansi said limited work was done because Alexkor’s efforts were focused on appointing a specialised contractor to remove and demolish the asbestos-contaminated and dilapidated old buildings

mathewsc@fm.co.za

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