Owner of the mine, Rio Tinto, no longer saw a need to continue with the loss-making operations. Photo: Reuters
Owner of the mine, Rio Tinto, no longer saw a need to continue with the loss-making operations. Photo: Reuters

Two years on, saved Zululand mine on steady growth path

By Vuslat Bayoglu Time of article published Sep 13, 2018

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JOHANNESBURG – Two years ago, just more than 1 300 workers in KwaZulu-Natal were about to lose their jobs. Their families were more likely going to face hardship. In a province where unemployment and poverty are huge challenges, as they are nationally, one job lost would be one too many.

The workers who faced this gloomy future were directly employed by the Zululand Anthracite Colliery (Zac) and the companies contracted to the mine. Not only were the future of the mineworkers looking bleak, the future of the mine itself was hanging in the balance.

Owner of the mine, Rio Tinto, a multinational conglomerate, no longer saw a need to continue with the loss-making operations. The mine was, in Rio Tinto’s perspective, ripe for sale. It had fallen off their radar of priories.

I and my fellow business partners at Menar Capital, a mining investment company, saw an opportunity in Zac. We considered the uniqueness of the mine located in an economically strategic region of Zululand. We also considered the uniqueness of the mineral resource: no known mine in South Africa produces low ash anthracite coal.

We bought the mine from Rio in August 2016. Our plan was to grow the businesses and contribute to the country’s socio-economic priorities from the local economy’s perspective. Our strategy was different to acquisitive approaches pursued by asset strippers who pretend to be good investors when, in truth, their aim is to asset-strip a company and sell it. Usually, such strategies leave employees and communities in the cold.

We were different. We link our business interests with the interests of workers and the community. In the case of Zac, the Zululand community was important for us.

I decided to live at the mine for four days a week for four months. I tried to understand what was done wrong and what needed to be done to change the fortunes of the mine.


I thought, if we can’t fix it, then the retrenchment cost would be huge not only to the workers in the medium to long term, but also to the company.

We had no other choice but to be successful. Since we celebrated a second anniversary last month, it was worth evaluating the results. We saved jobs and successfully turned a bleak picture for workers into a positive one.

We retained a shareholding structure that included the community and workers. We invested in the processing capacity of the mine by building a plant. We are expanding our investments. Plans were underway to sinking another shaft.

As production increased, we looked for new markets for our product in the US, Brazil, Vietnam and the Ukraine, among others. We were encouraged by the progress we made in two years. As a result, we were looking at investing more in the region by increasing production capacity at Zac, securing more mining rights in the area and converting others into operation.

The Zac thriving operation is a case study of how a strategy driven by desire to invest, grow, keep jobs, engage in community development and invest again can yield positive results. While our workers read scary headlines about job losses in the mining sector, we averted a bloodbath in many of our operations.

Vuslat Bayoglu is the managing director of Menar Holding.

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