A STATEMENT by Strategic Natural Resources (SNR) earlier this week confirmed that an application for the liquidation of Elitheni Coal would be heard on December 10.
There appears to be some question about the quantum of some of the claims against Elitheni and that is now being dealt with by the respective attorneys, but what SNR did state was that it had been informed that “some of the creditors submitting the liquidation notice have claimed (in an attachment to the liquidation notice) to have the funds available to acquire or invest in the company”.
SNR added: “To date no approach to acquire or invest in Elitheni has been made to the boards of Elitheni or SNR”.
SNR owns 74% of Elitheni Coal.
On a more positive note, SNR said that discussions were ongoing between Elitheni and several parties with a view to them “providing strategic longer term finance” in order to “secure a more permanent recapitalisation of Elitheni” and allow mining operations to start again.
Among the parties with which discussions are being held are a South African government agency that would “likely provide the strategic investment by way of a grant to Elitheni” and an overseas coal trader that was “looking at entering a royalty arrangement” with Elitheni.
SNR issued a warning, however, that “there can be no certainty that Elitheni will be able to secure any long-term strategic funding”.
Understandably, SNR’s share price on the London AIM, where it is listed, plummeted when the statement was issued on Monday to about one-tenth of the value it had 12 months earlier.
And there, one presumes, the matter rests until the application for liquidation is heard in court on December 10 or an agreement is reached with the creditors or the funding of which SNR speaks is forthcoming.
Economic development environmental affairs and tourism MEC Mcebisi Jonas, noted in reply to a question in the Bhisho legislature recently that “a lot of public sector investment has been tied to this project,” although he added that the infrastructure commitment from government was not affected by the situation.
Rather, he said, the problem lay with the operation of the mine.
Jonas said a decision was now awaited from the Industrial Development Corporation (IDC) on a possible business rescue package for Elitheni.
The importance of the development cannot be understated.
The potential for direct and indirect employment at Emalahleni is considerable and there must be substantial disappointment, coupled with anger within the community that what once promised so much has to date failed to deliver.
One has but to look at the unemployment rate in the local municipality to realise the impact that the success of the project could have.
The critical nature of the project stretches further, however, as the export of substantial quantities of coal through the Port of East London is vital to strengthen the case for the expansion of the port.
Thirdly, the mining of coal and the provision of the rail infrastructure from the mine to the port was seen as a critical element towards expanding the rail infrastructure and so opening up the former Transkei and providing access to markets.
If there is an understandable air of gloom over the Elitheni Coal Project at present, the mood is a lot more positive when it comes to the Wild Coast and it would appear that a solution has been found even to what was believed to be a totally intractable problem – land tenure.
Last month’s Wild Coast summit provided updates on two of the mega-projects associated with the area – the N2 road linking Gonubie with Isipingo on the KwaZulu-Natal South Coast and the Mzimvubu hydroelectric and irrigation scheme.
It would appear after a lengthy delay following the rejection of the first environmental impact assessment and court challenges to the positive Record of Decision issued for the second and subsequent dismissal of appeals, that an end is in sight to the legal wrangle.
Water and Environmental Affairs Minister Edna Molewa spelled out details of the R8-billion first phase of the Mzimvubu Project with work on the rehabilitation of the catchment area starting in February next year and construction of the dam at Ntabelanga, irrigation scheme and 180Mw Laleni Hydropower project all due to be completed by June 2020.
She said half-a-million people would benefit from the water reticulation project while “thousands of jobs will be created directly and indirectly during the construction phase”.
The estimated costs of the N2 highway are R5.1-billion for the Greenfields section of the road, R2.1-billion for the two major bridges over the Msikaba and Mtentu rivers and R1.8-billion for the upgrading of the existing N2/R61 route.
The Wild Coast area will benefit significantly, with R481-million spent directly on wages, R360-million with local manufacturers, R240-million going in income to local retailers and R120-million to local service providers.
Jonas told a media briefing at the summit that the provincial government was looking at investment of between R30 and R40-billion over the next decade, a significant amount for the poorest region in the Eastern Cape.
A decision can also be expected next year on the establishment of a Special Economic Zone for the Wild Coast that will focus specifically on agro-processing and tourism – the low-volume Wild Coast Meander, part of which is already under construction, is a key component of the latter. While Elitheni Coal and the Integrated Wild Coast Development Plan are not directly linked, they are connected in two important respects.
Firstly, they will bring development to impoverished areas of the country providing employment and entrepreneurial opportunities.
Secondly, they are linked because both will provide the logistics that are sadly lacking at present that will in turn increase export volumes through the Port of East London and also drive further investment in the agro-processing sector in the East London Industrial Development Zone. The people of this province need them both.
Patrick Cull is a freelance political writer
Eastern Cape needs Elitheni Coal Project to spur growth
There appears to be some question about the quantum of some of the claims against Elitheni and that is now being dealt with by the respective attorneys, but what SNR did state was that it had been informed that “some of the creditors submitting the liquidation notice have claimed (in an attachment to the liquidation notice) to have the funds available to acquire or invest in the company”.
SNR added: “To date no approach to acquire or invest in Elitheni has been made to the boards of Elitheni or SNR”.
SNR owns 74% of Elitheni Coal.
On a more positive note, SNR said that discussions were ongoing between Elitheni and several parties with a view to them “providing strategic longer term finance” in order to “secure a more permanent recapitalisation of Elitheni” and allow mining operations to start again.
Among the parties with which discussions are being held are a South African government agency that would “likely provide the strategic investment by way of a grant to Elitheni” and an overseas coal trader that was “looking at entering a royalty arrangement” with Elitheni.
SNR issued a warning, however, that “there can be no certainty that Elitheni will be able to secure any long-term strategic funding”.
Understandably, SNR’s share price on the London AIM, where it is listed, plummeted when the statement was issued on Monday to about one-tenth of the value it had 12 months earlier.
And there, one presumes, the matter rests until the application for liquidation is heard in court on December 10 or an agreement is reached with the creditors or the funding of which SNR speaks is forthcoming.
Economic development environmental affairs and tourism MEC Mcebisi Jonas, noted in reply to a question in the Bhisho legislature recently that “a lot of public sector investment has been tied to this project,” although he added that the infrastructure commitment from government was not affected by the situation.
Rather, he said, the problem lay with the operation of the mine.
Jonas said a decision was now awaited from the Industrial Development Corporation (IDC) on a possible business rescue package for Elitheni.
The importance of the development cannot be understated.
The potential for direct and indirect employment at Emalahleni is considerable and there must be substantial disappointment, coupled with anger within the community that what once promised so much has to date failed to deliver.
One has but to look at the unemployment rate in the local municipality to realise the impact that the success of the project could have.
The critical nature of the project stretches further, however, as the export of substantial quantities of coal through the Port of East London is vital to strengthen the case for the expansion of the port.
Thirdly, the mining of coal and the provision of the rail infrastructure from the mine to the port was seen as a critical element towards expanding the rail infrastructure and so opening up the former Transkei and providing access to markets.
If there is an understandable air of gloom over the Elitheni Coal Project at present, the mood is a lot more positive when it comes to the Wild Coast and it would appear that a solution has been found even to what was believed to be a totally intractable problem – land tenure.
Last month’s Wild Coast summit provided updates on two of the mega-projects associated with the area – the N2 road linking Gonubie with Isipingo on the KwaZulu-Natal South Coast and the Mzimvubu hydroelectric and irrigation scheme.
It would appear after a lengthy delay following the rejection of the first environmental impact assessment and court challenges to the positive Record of Decision issued for the second and subsequent dismissal of appeals, that an end is in sight to the legal wrangle.
Water and Environmental Affairs Minister Edna Molewa spelled out details of the R8-billion first phase of the Mzimvubu Project with work on the rehabilitation of the catchment area starting in February next year and construction of the dam at Ntabelanga, irrigation scheme and 180Mw Laleni Hydropower project all due to be completed by June 2020.
She said half-a-million people would benefit from the water reticulation project while “thousands of jobs will be created directly and indirectly during the construction phase”.
The estimated costs of the N2 highway are R5.1-billion for the Greenfields section of the road, R2.1-billion for the two major bridges over the Msikaba and Mtentu rivers and R1.8-billion for the upgrading of the existing N2/R61 route.
The Wild Coast area will benefit significantly, with R481-million spent directly on wages, R360-million with local manufacturers, R240-million going in income to local retailers and R120-million to local service providers.
Jonas told a media briefing at the summit that the provincial government was looking at investment of between R30 and R40-billion over the next decade, a significant amount for the poorest region in the Eastern Cape.
A decision can also be expected next year on the establishment of a Special Economic Zone for the Wild Coast that will focus specifically on agro-processing and tourism – the low-volume Wild Coast Meander, part of which is already under construction, is a key component of the latter. While Elitheni Coal and the Integrated Wild Coast Development Plan are not directly linked, they are connected in two important respects.
Firstly, they will bring development to impoverished areas of the country providing employment and entrepreneurial opportunities.
Secondly, they are linked because both will provide the logistics that are sadly lacking at present that will in turn increase export volumes through the Port of East London and also drive further investment in the agro-processing sector in the East London Industrial Development Zone. The people of this province need them both.
Patrick Cull is a freelance political writer
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