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A consortium, led by the African Exploration Mining and Finance Corporation (AEMFC), has been awarded the post-commencement funding (PCF) bid for Optimum Coal and its associated assets. The business rescue practitioners currently responsible for the mining business and the consortium are concluding the details of the management contract, with an option to purchase the assets at a value of R1 billion.

Project Buffalo PCF Award

The AEMFC consortium has the guaranteed funding ability and operational expertise to create a commercially viable business and plans to exercise its right to acquire the mine as soon as the litigation is resolved, it said in a statement. “The consortium plans to demonstrate the value inherent in a workable Optimum Coal that delivers meaningful and tangible growth for is operations and the sector”, it said. Funding will be used to pay the workers, suppliers and creditors, as well as to recapitalise the mine.

Compensation of the workers is a critical priority of the consortium, as is achieving shared value by providing a structure in which the communities and workforce surrounding the assets will benefit from ownership in the asset and/or operations. “The AEMFC Consortium’s funding is not contingent on an international trader but rather has been raised by the members themselves, with assistance from private capital. This demonstrates a confidence in its collaborative ability to re-ignite Optimum’s potential, while also delivering industry-related returns to investors. The award to our AEMFC-led consortium not only supports national transformation objectives but delivers a strong collaboration with the track-record to manage the mine into sustainability – which is especially important at a time when electricity supply and jobs are so threatened,” says Ellington Nxumalo, CEO and Co-Founder of Lurco Group, a member of the consortium.

“This has been a robust and rigorous process to identify the right partner in securing sustainability for the Optimum assets (Optimum Coal Mine, and Optimum Coal Terminal). Key to our decision is not just the capacity to deliver on the funding requirements, but also a demonstrated ability to manage and operate the mine and bring it back to optimal production. We are confident that the PCF award to the AEMFC consortium will see the prioritisation of sustainable employment and operational efficiency, while keeping energy security for South Africa at the centre of its strategy,” adds Bouwer Van Niekerk, Lead Lawyer for the business rescue practitioners.

“We are delighted to have been awarded the PCF deal for the Optimum Coal Mine and related assets.  We believe that this PCF award is of national significance and is fundamental to the country’s energy security. Through our consortium team of reputable and experienced sector experts, we are confident we can deliver the sustainable Optimum Coal South Africa both deserves and needs,” concludes Sizwe Madondo, CEO of AEMFC.

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