Seriti Resources, whose CEO Mike Teke donated large sums to the CR17 election campaign, is on the brink of acquiring South African Energy Coal (SAEC), which supplies 14% of coal to Eskom.
This has sparked calls for closer scrutiny into the deal, which can result in the mining company becoming Eskom’s major coal supplier.
IOL reports that Seriti, an 84% black-owned mining firm, already supplies 20% of Eskom’s coal and could depose Exxaro Resources as Eskom’s largest supplier.
The takeover is, however, pending and will be reviewed by the Competition Commission and Eskom. Australian group South32, which owns SAEC, announced recently that it had entered into negotiations with Seriti for the transfer of SAEC assets.
Parliament has been asked to probe the transaction before its approval by the South African Youth in Mining (SAYIM), who called for transparency.
Sayim chairperson Thato Abrahams said it would be unjust for one company to benefit as the sole supplier.
“As young people operating within the mining industry, it’s our collective view that the South32 divestment presents an ideal platform in the mining sector to catalyse genuine economic transformation through changing the ownership and control patterns of the mining sector in the country fundamentally.
“It is deeply unjust that, in this country, that we continue the pattern of the same groups being the ones who are given the opportunities while the rest watch on as spectators.”
Meanwhile, Eskom has confirmed it had norms to adhere to before the approval of the deal.
“The sale transaction of South32’s SAEC coal assets has a few condition precedents, and among them are Eskom’s consent in ceding the agreements from South32 to the successful bidder, Competition Commission consent, and approval by the department of mineral resources for the transfer of mineral rights.”
Eskom, however, denied that Seriti stood to become its majority coal supplier.
“Should Seriti successfully acquire South32’s coal assets, it will not be the largest coal supplier to Eskom. However, but will be among the largest suppliers.”
Seriti also denied assertions of unfair dominance, should the deal be approved.
(Compiled by Gopolang Moloko)