Sentula Mining and Shanduka Resources have decided to merge and form a strong mid-tier coal producing and mining services company. An announcement to this effect was made last week. 627 million new Sentula Mining ordinary shares shall be allotted to Sanduka Resources.
This will give Sentula Mining a 30% interest in the entire share capital of Kangra Coal and Shandula Coal which are subsidiaries of Shanduka Coal investments. Shanduka Coal is owned 70% by Glencore International and 30% by Sanduka Resources.
The new group which is formed will be controlled 51.9% by Shanduka Resources for a total consideration of 2.1 billion rand. This transaction will allow Sentula Mining to triple its coal assets. After the deal is completed Sentula Mining will be called Shanduka Mining limited Robin Berry the present Sentula CEO said in a statement on Thursday.
Mr Berry said that by partnering with Shanduka they believed that the broader group, with credible empowerment credentials, provides a more robust platform for generating sustainable shareholder value over the long-term.
The annual production of Sentula will be 12.5 million tons of coal, with resources of about 435-million minable tons in situ. The main assets of the new company will be the mines Sanduka Coal is operating in Graspan Colliery, Middelburg Townlands Colliery and Springlake. The deal will also boost the Black Economic Empowerment credentials of the two companies.