New coal miner eyes bigger piece of the pie

Johannesburg - Junior mining company Black Royalty Minerals (BRM) has launched its first operating colliery in Bronkhorstspruit, eastern Pretoria, and is already promising more influence in the coal sector.

The colliery cost R150m to build and there is a plan to start expanding the mine in the last quarter of this year.

Speaking to City Press after the launch event this week, BRM chairperson Ndavhe Mareda said the Chilwavhusiku Colliery has off-take agreements with South32 to provide 350 000 tons of coal a year and another with Eskom for twice as much, in addition to other inland clients.

Mareda, who is the company’s major shareholder, said BRM had its eyes set on buying a number of coal assets within the next two years.

Chilwavhusiku Colliery, the first colliery in the town, became fully operational in the last quarter of 2017 and has contracted Stefanutti Stocks as its mining contractor.

“While community development is a priority, our business strategy is equally important, which combines future mining acquisitions within the next 12 to 24 months and exploring export opportunities. These will allow us to diversify risk and increase earning potential,” said Mareda.

He pointed out that BRM’s development plans for the Bronkhorstspruit community include ensuring that more than 80% of its colliery workforce comes from surrounding communities. The colliery wants to invest in promising young students by offering them tertiary education bursaries, as well as outsourcing and collaborating with local businesses to advance the economic circumstances of the community.

“Employing this strategy allows BRM to make a further contribution to the community of Bronkhorstspruit by employing community members to address joblessness and the social problems that are caused by unemployment,” he said, adding that the colliery already employs about 350 people.

“While public-sector support is crucial to the development of junior miners, we cannot ignore that we need to be constantly innovative. Our approach is two-pronged – maintaining and growing our South African operations, integral to which is diversifying our mineral resources assets and revenue streams, such as export opportunities, so that volatility and macroeconomic risks to the growth of the mining business are minimised,” Mareda said.

Chilwavhusiku almost never saw the light of day when a neighbouring chicken farmer took it to court last year to stop mining activities but Mareda said the matter has been resolved and the two had settled their differences.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
ZAR/USD
17.00
(-0.09)
ZAR/GBP
21.24
(-0.12)
ZAR/EUR
19.14
(-0.13)
ZAR/AUD
11.81
(-0.13)
ZAR/JPY
0.16
(-0.20)
Gold
1774.74
(+0.03)
Silver
18.05
(+0.01)
Platinum
808.00
(+0.25)
Brent Crude
42.78
(-0.79)
Palladium
1914.01
(+0.62)
All Share
54521.90
(-0.17)
Top 40
50179.89
(-0.26)
Financial 15
10150.02
(-0.64)
Industrial 25
76554.73
(+0.52)
Resource 10
50138.02
(-1.24)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1592 votes
I am taking a hit, but should be able to recover in the next year
23% - 2085 votes
My finances have been devastated
35% - 3134 votes
It's still too early to know what the full effect will be
25% - 2257 votes
Vote