The long wait is finally over for former employees of Arnot Mine when coal producer Exxaro finalised its transfer of the Arnot Mine to Arnot Opco. The transfer means that former employees, the community and Wescoal are now owners of the mine.
This was a ground-breaking and first of its kind transaction in South Africa’s mining history and a transaction that will benefit former employees of Arnot and the community at large. According to Exxaro CEO, Mxolisi Mgojo, the company has completed the important steps towards transformative employee empowerment. “Exxaro strives to power better lives in Africa and beyond and this partnership is testament to how we live our purpose. We look forward to the success and contribution that Arnot Opco will make to the industry and the community.”
The transaction embodies the spirit of empowerment and demonstrates Exxaro’s commitment to responsible corporate citizenship. The transaction involved Exxaro transferring the Arnot mining rights and its movable and immovable assets at no cost. Former employees at Arnot Mine have been given 50% ownership of the mine through a trust, as well as a private entity, Innovators Resources.
Bontle Aphane, CEO of Arnot Opco, is confident that Arnot Mine will be in production soon and is pleased with the progress Arnot Opco has made towards taking control of the asset. “I am confident of the Arnot mine team’s capability and we aim to be successful by collaborating with all stakeholders.”
IR has partnered with Wescoal Holdings (WSL) – a coal miner, trader and supplier to the domestic and export market, to restart the Arnot mine and unlock its value. IR is 100% owned by former mineworkers, while Wescoal’s 50% interest is subscribed for in Arnot HoldCo, whose only asset is its shareholding in Arnot OpCo, which in turn holds the Arnot Mine.
Wescoal CEO, Reginald Demana, said, “We are excited being part of this landmark transaction which embodies broad-based empowerment and secures employment, providing employees and communities around the mine with equity participation as outlined in Mining Charter Three. Additionally, we are pleased that Wescoal Mining is the enabling partner in the relationship with IR in unlocking value from these coal reserves that otherwise would have been sterilized by a ‘standard’ mine closure process.”
In addition, the deal enables Arnot Opco to restart the mine and it is anticipated that production will mostly be supplied to Eskom. Arnot Mine can potentially deliver coal to the Arnot Power Station by conveyer belt, resulting in a significant cost competitive advantage.