Seriti Resources said on Monday that all of the hurdles had now been cleared to allow it to acquire the coal assets of South32 SA. The final hurdle was Eskom’s consent to a new coal supply agreement at its Duvha Power Station.
The deal was initially inked in November 2019, but some acquisitions take time. The sale is now expected to be completed on 1 June, with Seriti acquiring the majority stake in South32 SA Energy Coal Holdings (Pty) Ltd (SAEC).
“Eskom has agreed to amend the existing terms and conditions stipulated in the Duvha Coal Supply Agreement, which is currently loss-making, adjusting the coal price to R550 per ton with effect from 1 June 2021, with an annual escalation (from 1 January 2022) in line with the Producer Price Index. The agreement will run until 31 December 2024,” Seriti said in a statement.