South32’s SA coal sale to be concluded early in 2021
If successful, the transaction will see Seriti Resources become a major supplier of coal to Eskom
With the end of 2020 fast approaching, the sale of South32’s SA coal assets to Seriti Resources is now set to close by the first quarter of 2021, the diversified global miner said on Monday.
The deal to divest the SA Energy Coal (SAEC) business to Seriti was announced in November 2019 with the aim to finalise the transaction before the end of the 2020 calendar year.
If successful, the transaction will see Seriti become a major supplier of coal to Eskom, but first, approval is required from the Competition Tribunal and a new, more favorable supply agreement with Eskom for the Duvha power station must be secured.
The tribunal is expected to deliver its decision to either approve or prohibit the merger no later than January 5 2021 following the end of the merger hearing last Friday. Eskom’s submissions to the tribunal were heard confidentially.
“While the transaction remains subject to material conditions, including the Competition Tribunal’s decision and approvals from Eskom, we continue to make progress towards achieving these and expect to conclude the transaction during the March 2021 quarter,” South32 said in a statement.
Separately, South32 said Eskom had submitted a new energy supply agreement for its power-intensive Hillside Aluminium smelter to the National Energy Regulator of SA (Nersa), which will cover a 10-year period with a tariff that is rand-based.
The previous power supply agreement to the smelter was controversial as it was linked to the alumina price and so was severely loss-making for Eskom when the commodity price was low.
South32 said the regulator’s approval process is expected to be concluded during half-year to end- June 2021r.
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