Mike Teke. Picture: JEREMY GLYN
Mike Teke. Picture: JEREMY GLYN

 

There has never been a better time to make acquisitions in SA, says Mike Teke, who leads Seriti Resources’ management team buying Anglo’s Eskom-tied thermal coal mines for R2.3bn.

Teke’s investment company, Masimong, is one of the Seriti consortium’s members. Masimong, founded in 2013, has a focus on financial services, energy, agriculture and industry.

Teke was born in KwaThema, Springs in 1964 and holds an MBA from Unisa. He started his career as a teacher in 1990 and in 1992 joined Lever Ponds. In 2000 he moved to BHP Billiton, where he rose to the position of vice-president of human resources at Ingwe Collieries. He was appointed head of human resources at Impala Platinum in 2005.

In 2007 Optimum was formed, a 71% black-owned company whose shareholders included Teke, Mlungisi Kwini, Tom Borman, Peter Gain and the late Eliphus Monkoe. Optimum was listed on the JSE in 2010, with Teke as CEO, after acquiring Optimum Collieries, a stake in Koornfontein mines and a stake in Richards Bay Coal Terminal (RBCT) from BHP Billiton in 2007. Optimum is SA’s fourth-biggest coal exporter and was intended to form the foundation for a black-owned coal mining and exploration group, but events intervened.

Optimum has two mineable coal seams, one with export-quality coal and the other with Eskom quality, which was supplied on a long-term contract until 2018 to Hendrina power station. But the Eskom contract became increasingly loss-making as the mine aged and costs rose.

In 2011 Glencore and Shanduka launched a bid for Optimum, whose shares were trading at bargain levels. They began by taking a 14% stake and followed up with a general offer that valued Optimum at R8.6bn. When Glencore owned Optimum, issues over the Hendrina contract came to a head, culminating in Optimum being placed in business rescue and sold to Tegeta Mining & Resources, a company owned by the Gupta family.

Throughout his career, Teke has responded diplomatically to the pressures facing the mining industry. However, he has become increasingly outspoken in recent years. In 2013, as chairman of RBCT, he pointed out that, contrary to the statement by Brian Molefe (then Transnet CEO) that RBCT was a state asset, it had been financed by its shareholders.

"I don’t like being confrontational, particularly in the public space," he says.

In 2014, when the mining industry came under pressure from then minerals minister Ngoako Ramatlhodi on disagreements over the achievement of charter targets, Teke, who was vice-president of the Chamber of Mines, said: "There is a commitment and will, from our side, to transform, but it is not a flat easy thing to do as some black partners will sell their stake to make money while other empowerment shares are under water".

In 2015 Teke, who was then president of the chamber, defended the organisation against the accusation that it had "no backbone". He said the chamber’s role was advocacy. "Successful advocacy depends on finding the delicate balance that puts SA first but creates an environment in which the mining sector can function optimally."

Seriti’s R2.3bn purchase will give it Anglo’s New Denmark, New Vaal and Kriel coal mines. Teke says Seriti is interested in buying other mining assets, including New Largo and Anglo’s export coal collieries, with the goal of creating a large mining company.

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