South32 mulls bids for SA coal assets
The miner expects to provide a further update to the market in the December 2019 half-year
Australia-based miner South32 says it is considering bids for its coal assets in SA’s Mpumalanga province.
The group’s SA Energy Coal business, which South32 has been looking to offload, includes four coal-mining operations and three processing plants that produce energy coal for the domestic and export market.
The cut-off time for submission of bids was the end of June.
“We are currently engaging with the bidders regarding finalisation of their offers that will form part of the group’s usual biannual assessment of carrying values for our operations,” the miner said in a quarterly report for the three months ended June.
“We expect to provide a further update to the market in the December 2019 half-year,” the company said.
Coal production at SA Energy Coal declined 8% in the 2019 financial year as export sales volumes were hurt by an extended outage of the Klipspruit dragline following an incident in August 2018.
Though domestic sales were largely unchanged for the year, they were 16% lower in the June 2019 quarter following reduced sales of lower-quality stockpiled product.
South32’s Hillside Aluminium smelter in Richards Bay achieved record production for the year “despite an increase in the frequency of load-shedding events”, the company said.
A restructuring of the smelter’s workforce was also completed during the June 2019 quarter, but lower aluminium prices and elevated raw material input costs are expected to result in the smelter recording a loss in the 2019 financial year.