KEATON Energy has taken legal action against employees responsible for allegedly colluding with contractors to steal coal at its Vaalkrantz colliery in Mpumalanga.
The junior producer has reported a R56.5 million impairment charge on the mine in the year to March as a result of this alleged collusion.
Keaton is a JSE-listed junior coal producer focused mainly on producing thermal coal at its two collieries, Vaalkrantz and Vanggatfontein, for Eskom. It also exports anthracite to Brazil through an offtake partnership with Glencore.
The company’s performance fell apart in the fourth quarter after the discovery of missing product stock worth R24.7m at Vaalkrantz, while geological problems and a fatality (a first for the colliery) disrupted production.
Speaking during the company’s financial results presentation in Johannesburg yesterday, Keaton’s chief executive Mandi Glad, said legal action had been taken against the employees. “I have never been so cynical or disillusioned. I am deeply disappointed in the people we trusted.”
A new management team has been appointed at Vaalkrantz to recoup the losses and to prevent similar incidents in the future.
“We have pressed charges against one person; the number will quadruple in a week,” Glad said.
The mine has reviewed Vaalkrantz business and this has resulted in the impairment charge and a related deferred tax asset reversal of R35.9m.
“Having reviewed the mine plan, we have excluded certain areas and this resulted in a 23 percent decrease in the mine’s resource and 15 percent decrease in the reserves,” Glad said.
At Moabsvelden, which is 3km from Vanggatfontein colliery, Keaton is addressing regulatory requirements and expect these to be resolved in the near future.
The expansion in Vanggatfontein has been delayed until the grant of its water-use licence, and the conclusion of a coal supply deal with Eskom.
Eskom has previously said it will not enter into contracts with coal suppliers without a water-use licence.
“Until we have a water-use licence we will not continue with the project,” Glad said.
Keaton has changed its initial plan to make newly acquired Xceed Resources export a quarter of its production and sell the rest to Eskom owing to soft commodity prices.
Keaton Energy shares closed unchanged at R1.30.