South32 will invest R 4.3 billion ($395 million) from April next year to manage South Africa Energy Coal (SAEC) as a stand-alone business, extending the mine life of Klipspruit colliery by up to 20 years.
Graham Kerr, South32 chief executive officer, explained that establishing SAEC as a stand-alone would simplify the company, improving competitiveness and sustainability.
It is also hoped the move will increase opportunities for company ownership in line with the country’s Broad-Based Black Economic Empowerment Act (B-BBEE).
“We will also seek to increase the local ownership of SAEC, consistent with our commitment to South Africa’s economic transformation,” he explained, “and may ultimately list the business on the Johannesburg Stock Exchange.”
South32, itself a spin-off of BHP, was formed in 2015 as a home for the mining giant’s lower-profile mining investments.
SAEC currently represents about 35 per cent of South32’s workforce, with 4100 full-time employees and 4300 contractors, with a coal resource of 4.9 billion tonnes and reserve of 346 million tonnes.