Sitatunga, on the 7th August 2018, signed an agreement to buy the Leeuw Braakfontein Colliery (which Sitatunga has renamed ZImpande Colliery) from the JSE-listed mining company Wescoal, for R103 million.
Zimpande Colliery is an advanced-stage exploration property situated on the Klip River Coalfield, which is located about 10 km from the town of Newcastle,KZN. The assets include an approved mining right and overlaying surface rights.
The area has a potential for coal extraction through open cast mining at the initial phase as well as underground mining at a later stage. Sitatunga is excited about the prospect of converting the potential at Zimpande into an owned and managed mining operation. Operations will commence as soon as everything has been cleared by regulators. Sitatunga’s investment will create much-needed jobs and bring about development in the area.
Sitatunga Resources’ largest shareholder, Menar, wishes to build on its existing businesses including Canyon Coal and Zululand Anthracite Colliery, through this growth vehicle called Sitatunga Resources. Sitatunga will benefit from the experience in responsible investing, where the focus is simultaneously on growth, job creation and environmental care.
The transaction is subject to regulatory approvals which are still pending.
East Manganese is situated near the Manganese-rich town of Hotazel, Northern Cape. Sitatunga signed a deal on the 28th August 2018 to purchase the project from Southern Ambition. Open-pit mining operations are expected to start in 2019.
The East Manganese acquisition is the ideal entry for Sitatunga into the Northern Cape and Manganese. With this, Sitatunga can continue building a bigger Manganese portfolio in the area.
Manganese is used mostly in steel manufacturing and other industrial applications. Sitatunga believes the market fundamentals over the medium to long term would be positive for the resource. South Africa holds the majority of the world’s Manganese resources. Sitatunga can leverage its existing skills and relationships in South Africa to build a Manganese business.
Sitatunga Resources’ largest shareholder, Menar, continues to grow and diversify its geographical location of coal assets in South Africa. Furthermore, Menar believes the time is right to diversify its asset base by breaking into the Manganese sector.
The transaction is subject to regulatory approvals, the first of which being the Environmental Approval being approved on the 22nd February 2019.