Newly formed black-empowered company Sibambene Coal is seeking new investment opportunities. SA Mining recently caught up with the company to understand the driving force behind its establishment and its strategy going forward.

Q: When was Sibambene officially established and what are the strategic goals in the long and short terms?

A: Dr Nomfundo Ngwenya, chairperson: Sibambene Coal Conversations started early last year and we were all aligned in terms of the vision. The message we want to make clear is that we want to acquire and develop coal assets. We are also looking at existing operations. So whether existing or greenfield we are prepared to consider the opportunities. In terms of the ownership structure of the company we will make sure that whatever we do, we never dilute the 51% black shareholding – 5% Inkhanyeti (women’s Ggroup)5% Khulisa Trust (employees), 5% Siyakha Community Trust (host communities), 10% Mirospan Mining (black mining industrialist group), 26% Kalyana Resources (black mining company) and 49% Menar and Mercuria. Keeping the ownership structure predominantly black is a clear strategic goal for us. We want to be the embodiment and practical example of what Mining Charter III seeks to achieve. From a technical and financial capability perspective, we are capable and we believe coal is worth investing in.

Q: What is your view on coal versus renewable energy and in relation to global warming?

A: Dr Sakhile Ngcobo, director: Sibambene Coal Of course, we need renewable energy. But we also need technology for cleaner coal fired energy. Fundamentally coal is a bigger creator of employment among all energy sources. If you look at the number of jobs in the coal sector, it’s over(700 000 direct and indirect).Renewables will never supersede the coal employment numbers. . Most of the investment on renewable energy occurs elsewhere and not in South Africa

Q: In the long term, is there any plan to make this company public?

A: Vuslat Bayoglu, director: Sibambene Coal We think that listed coal companies on the JSE are undervalued. We don’t see a big appetite for a new listed coal mining company, hence we don’t have the intention to list for now. The market may change in the future. The global perception at the moment is not ideal for coal, but the reality is without coal you don’t have power. You cannot have a grid in South Africa that relies on renewables only, but you have to have fossil fuel and renewables together. They are complementary. We think that coal is there, though unappreciated. Hence, we don’t have an intention to list the company.

Q: In terms of market reach projections, are you more SA-focused or will you explore exports?

A: Bayoglu We are South Africa-centric. We think that South Africa has the right systems in place. There is the rule of law, stability and the country has a lot of potential. So, we are not looking at other coal jurisdictions – we are SA-centric.

Q: Some people say there is a shortage of coal in the country and Eskom is not getting enough coal.

A: Bayoglu There is enough coal for Eskom because there are enough coal resources in the country. South African coal is not very deep, it is shallow and fairly easy to mine. If you consider for example, Mpumalanga has a flat surface. If you compare that with other coal jurisdictions like Colombia, Russia and Indonesia, you realise that South Africa has a great advantage in mining and taking coal to coal-fired power stations and to the port for export market. There is good infrastructure in terms of power stations, the geology is great and there is enough for Eskom. Eskom’s problem has been poor planning and this they have admitted numerous times and they are fixing it. Once they are fine in terms of planning there will be no problems.

Q: On South32’s coal asset, domestic and export market …

A: Bayoglu Sibambene is not about South32’s coal assets. We can look at other assets. We are aware that South32 is divesting its coal assets. But the whole idea is, can we create a new player with new faces that invests in new coal mining opportunities? In the past 10 years who created new mines in this country? Except Exxaro, Canyon Coal and Sasol, there has been no new investment coming in because in the previous administration people thought that South Africa was not the right jurisdiction. I am thinking that Sibambene, with whatever opportunity it will create or acquire, will have a balanced portfolio of exports, and Eskom, because both markets are doing well, l think. Eskom needs coal. But there is also a need for competition. If only four companies control all Eskom supplies, it’s not good for the country, it’s not good for the other companies in terms of competition, it’s also not good for junior miners who want to get involved in mining. We need diversity in sources of supply to Eskom.

Q: Looking at mining safety statistics, how are you planning to turn the industry around to be incident-free?

A: Ngwenya We will leverage from the experience of Menar’s existing operations. They have been very successful in managing safety. Their track record shows that there have been no fatalities that are related to the mining operations of Menar. The experience Menar has when it comes to ensuring a high record in matters of safety is the kind of experience we will draw from once Sibambene becomes operational.

Q: We now have new technologies in the market that can be retrofitted to the existing power stations to produce clean energy by reducing greenhouse gas emissions. Has the mining community thought about helping Eskom invest in those technologies so that you can brush off the stigma that coal carries?

A: Ngcobo As a company it’s an area we are looking at. We are open to new ideas, it’s a new investment, it’s a new space. We do want to mine sustainably and responsibly and it is something that drives us and is well articulated in our values as a company

Q: On the significance of developing new coal mines? A: Bayoglu There are companies that have been sitting on assets for years not developing them thereby not creating jobs. If the projects are started with the right people, technically strong people, that translates to jobs. We currently employ 3 500 people in all our operations. We have the appetite to put capital into developing assets. We can employ 13 000 people if we get the right resources and start those projects. Q: On coal and its role in our country?

A: Ngwenya We shouldn’t be shy as a country to maximise the benefits from coal. We need to secure energy supply in this country because it’s central to the functioning of businesses, of households and everything that we do as a country, and we have seen what failure to secure that supply can translate to. Beyond that we need to ask ourselves: How do we then ensure that the spoils of this natural resource spread across the broader population of South Africa? It’s just a matter of getting the assets and getting started.

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