Australian mining company, South32 is planning to spin off its South Africa Energy Coal (SAEC) business and run it as a stand-alone unit from April 2018.
The move is part of the firm’s plans to improve its financial performance and intends to manage SACE separately with tailored functional support, systems and governance processes.
Additionally, South32 said that the process would allow it to further simplify the way to manage its global portfolio.
South32 CEO Graham Kerr said: “Establishing South Africa Energy Coal as a stand-alone business will enable us to improve the operation’s competitiveness and ensure its ongoing sustainability.
The firm plans to begin a process to broaden the ownership of SAEC.after its establishment as a stand-alone business.
Kerr added: “We will also seek to increase the local ownership of South Africa Energy Coal, consistent with our commitment to South Africa’s economic transformation, and may ultimately list the business on the Johannesburg Stock Exchange.”
Separately, South32 said it has approved R4.3bn ($301M) investment in SAEC’s Klipspruit Life Extension project (KPSX).
The investment is aimed at extending the operational life of its Klipspruit colliery by approximately 20 years.
Kerr added: “Approval of the R4.3bn Klipspruit life extension project will secure the future of the colliery for at least another 20 years, ensure employment for 740 people and create 4,000 jobs during construction.
“The investment is expected to generate an internal rate of return (IRR) on investment of more than 20% by unlocking 616Mt of resource at the Klipspruit South and Weltevreden deposits, and fulfilling around half of our current rail obligations with Transnet.”