Mine workers go from being jobless to owning a colliery

Mineral Resources Minister Gwede Mantashe, right, and the department’s director-general, Thabo Mokoena, at Exxaro Arnot Colliery. Pictures: Ndileka Lujabe
Mineral Resources Minister Gwede Mantashe, right, and the department’s director-general, Thabo Mokoena, at Exxaro Arnot Colliery. Pictures: Ndileka Lujabe

The efforts of eight former Exxaro Arnot Colliery employees who were laid off in 2015 have paid off. Their former employer not only handed them a lifeline, but also made them co-owners of the mine.

The eight employees – Mxolisi Hoboyi, Bontle Aphane, Raymond Khumbana, Mandla Ntulo, Hitandra Lala, Poppy Ranta, Paul Kasango and Vukani Thole – were among the 1 200 employees who lost their jobs when the mine closed in 2015 because Eskom did not renew its coal supply contract.

The eight are now 25% owners of the coal mine. The rest of the former workers own another 25% and Wescoal owns the remaining 50%, having put in more than R100 million.

All 1 200 former employees, including those who have already been employed elsewhere, comprise the shareholders of the 25%.

During a ceremony held at the mine near Middelburg in Mpumalanga earlier in the week to mark the handing over of the workers’ 50% shareholding in the venture, Mineral Resources Minister Gwede Mantashe said the deal was a groundbreaking first for the country and there was a responsibility on all the stakeholders to make it a success.

Speaking to City Press on the sidelines of the event, Hoboyi said the eight employees, who had contributed their pensions to own 25% of the workers’ 50%, had started a company called Innovators Resources.

The company had been advised by Exxaro to get a partner with enough operating capital, which led to Wescoal coming on board.

“Innovators Resources was established solely for this transaction and to reopen the mine. We even took a decision that none of us would look for work elsewhere. That is the risk we took.” The company negotiated with Exxaro for almost two years to thrash out the details of the deal, he said.

Hoboyi said although Wescoal’s contribution was R100 million, the overall value of the deal was more than R200 milllion. He said 5% of Wescoal and the workers’ shares had been allocated to communities to comply with the mining charter.

Exxaro chief executive Mxolisi Mgojo said the board had agreed to give all its assets at the mine, including the mining right, to the former workers to use as equity to make up the other 25% of the deal.

Mgojo said although a deal such as this had not ever been done in the country before, it had not been a difficult task to convince Exxaro to approve it.

“We didn’t do it to improve Exxaro’s BEE score. All we had to do was say (to the board) that there was a chance to create a new BEE company. There comes a time even BEE companies can create new BEE companies,” Mgojo said.

At its peak Arnot colliery produced 6 million tons of coal a year for the neighbouring Eskom-owned Arnot power station, but had to shut down in 2015.

The mine is expected to reopen in September. Mantashe said the new management, made up of Innovators Resources and Wescoal, has already committed to give preference to the retrenched workers first before considering new workers.

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