JOHANNESBURG - South African junior miner Wescoal reported on Wednesday that its integration programme was at an advanced stage and progressing according to plan.
This came after Wescoal last year acquired Keaton Energy Holdings for R525 million cash and a shares offer in a bid to diversify its asset base, realize economies of scale and synergies, and also strengthen its balance sheet and free cash generation.
The enlarged business now has coal resources well in excess of 300 million tonnes, four operating mines, three processing plants and significant interests in coal supply chain infrastructure.
Wescoal said that identified personnel redeployments and overhead reductions had been completed and implemented immediate operational cost-savings and efficiencies that were identified during the acquisition's due diligence process.
The combined effect of these savings, Wescoal said, is in excess of R40 million per annum.
Wescoal said mining operations at Vanggatfontein Colliery, formerly Keaton's flagship mine in Delmas, Mpumalanga, were stable and integration into the group was progressing according to plan.
The group said it was now better positioned to meet increased demand, both from Eskom as well as other domestic and export customers.
Total run of mine (ROM) production attributable to Wescoal has doubled to 4.8 million tonnes up until end December 2017 and the group is well on its way to achieve its announced eight million tonnes ROM production target.
Wescoal also said the R440 million long term debt facility it secured during 2017 had significantly increased the liquidity and cash reserves of the group in addition to strong internal cash flow generation.
The company paid two dividend tranches during 2017, a financial year dividend of R12 million in September 2017 and a financial year 2018 interim dividend of R14 million in December.