Future looks rosy for Inyosi Coal after R1bn Thungela Resources deal

ANGLO Coal’s black economic empowerment (BEE) partner Inyosi Coal is on a sound financial footing following the successful completion of a R1 billion deal last month, in which it acquired shares in JSE-listed Thungela Resources.

In an interview yesterday, Inyosi Coal chairperson Yoli Balfour said: “Once we have cash, it’s a different ball game. Now we can start doing business, not empowerment… We are a hands-on group. We are participating in our investment. We are in a position of decision-making, creating a meaningful business and making financial sense for Inyosi.”

Thungela reached an agreement with Inyosi to acquire the remaining 27% shareholding of Anglo American Inyosi Coal (AAIC), in exchange for 4.18 million shares in Thungela. This means Inyosi will own 3.02% of Thungela.

Balfour said the past 15 years were a difficult journey for Inyosi, which is made up of shareholders. The shareholders are Ndonsa which owns 33%, Pamodzi 33%, WBDIH 19% and Anglo-Inyosi Community Trust 19%.

“We are eager for this journey because, with black economic empowerment, everybody is complaining that it has not worked and it’s difficult for it to work. You get into this big business with no capital,” Balfour said.

She said Inyosi was formed in 2007 and became a BEE shareholder of Anglo Coal, and AAIC was formed.

“We were vendor financed by Anglo, so we had a lot of debt.

“At that time, when we started Inyosi owned 27%, while Anglo Coal owned 73%. We then formed a new company, AAIC, and the transaction was worth R7bn.

“It’s been a tough road. Especially since Anglo American’s exit of Eskom-supplying coal mines in 2019 and its complete exit from all coal mines in 2020,” she said.

Following Anglo’s demerger with Thungela was when Inyosi began negotiations with Thungela.

“After negotiations were done with Thungela, we settled the debt and the shares we received from Thungela are net of debt,” she said.

Balfour said the coal sector was one of the most important industries in the country.

“While globally there is a push for cleaner energy, South Africa is heavily reliant on coal as our power comes from it. But having said that, it must be mined in a respectful way for our planet, for our environment, and for even for our community,” she said.

Balfour said that she hoped Inyosi’s story would encourage other BEE companies not to be discouraged.

“Many people do try to make deals, and they get tired on the road. The debt overcomes them. Negotiating doesn’t succeed when you negotiate from the point of less power, because you don’t have enough funds.

“Thungela was willing to listen to us and then we found a solution. We can give value and both parties will benefit mutually,” Balfour said.