Dismissal of R42m claim sends up coal company's share price

JOHANNESBURG (miningweekly.com) –  A R42.5-million claim brought against coal mining company Keaton Mining by opencast mining services company Megacube Mining has been dismissed with costs.

The JSE-listed Keaton said in a Stock Exchange News Service announcement on Tuesday that Megacube would also be liable for its failure to deliver 300 000 t of run-of-mine (RoM) coal a month and would be required to make payment equal to the present value of 657 583 t of RoM coal not mined.

By mid-afternoon, Keaton Energy’s share price had jumped 11.32% to 59c a share.

According to Bloomberg, Megacube, formerly known as Scharrighuisen Opencast Mining, operates as a subsidiary of the JSE-listed Sentula Mining.

The costs would include the employment of two counsel plus the qualifying fees of expert witnesses.

The quantum of the disputes would be dealt with in the coming months and a follow-up announcement on the outcome of the quantification portion of the arbitration would be released when that part of the arbitration had been finalised or settled, Keaton Energy, headed by CEO Mandi Glad, stated.

The company added that its headline earnings a share for the year ended March 31, would benefit from the reversal of the R42.5-million claim, which was previously recorded in trade and other payables.

The matter was referred to arbitration, which took place during February and March, with closing arguments heard in April.

In March, Keaton reported that it was continuing to follow legal processes to resolve the illegal industrial action by employees of underground mining contractor Nasonti Mining that included an illegal sit-in at the group’s Vaalkrantz colliery.

In June last year, the company reported the theft of R24.7-million worth of coal from its troubled Vaalkrantz colliery in KwaZulu-Natal, necessitating a R56.5-million impairment and R35.9-million deferred tax asset reversal.