agm resolutions, page-6

AP, Sekoko has been busy with the BFS since late 2008, according to the press, what's Higgo done for that, he wasn't even on the FSE payroll then.

Jobs for the boys and cream off the gravy.Read below:
SA coal industry blighted by failure
Brendan Ryan | Sun, 09 Aug 2009 20:45
[miningmx.com] -- IF ever there was a sector poised to deliver great returns it was the South African coal mining industry over the past 18 months. However, a number of coal juniors have suffered despite the great-looking fundamentals.

But there have also been some success stories. They include AIM-listed Bisichi Mining, which almost trebled earnings to ₤6m in the year to end-December, and ASX and JSE-listed Coal of Africa (CoAL), which put in place a number of innovative agreements to secure port and rail allocations for its planned exports.

But those were outweighed by the tales of woe from companies such as SA Coal Mine Holdings (SACMH), Sentula and HCI Khusela Coal.

Then there were the investors who ran into problems, such as GMR Energy of India, which decided to pull out of its commitment to fund the South African coal business of TSX-listed Homeland Energy, which has developed the Kendal Colliery near Witbank.

GMR had already invested heavily in Kendal. It took a financial beating when Homeland opted to buy back the stake through an issue of shares at a price well above ruling market prices instead of the cash that GMR had stumped up.

A key issue affecting the industry as a whole involved the continuing problems getting coal exports out of the country due to the inadequate infrastructure provided by Transnet Freight Rail.

Problems that hit hard came across the board, ranging from financial to technical to operating management, regulatory requirements and even theft. SACMH was forced to put its two mines on care and maintenance at end-March due to soaring costs, lower-than-forecast recoveries and “a material stock discrepancy between Umlabu mine production records and the weighbridge”.

In other words, coal produced from the mine somehow got off the property without being accounted for.

SACMH also had problems with its mining contractor, which were attributed to a lack of in-house technical managers able to monitor the contractor’s operations.

At HCI Khusela Coal – the joint venture between HCI and the unlisted Khusela empowerment group – the first mine has finally come into production about a year late and after an investment of more than R200m. In the process the original project contractor was replaced and the MD of HCI Khusela Coal quit, while HCI is now engaged in a legal battle with the Department of Minerals & Energy.

When the department finally granted the new order mining right for HCI Khusela Coal’s Mbali mine it inexplicably allocated a key central portion of the ground to the Central Energy Fund. Overall, not a pleasant experience for HCI – which went into the venture believing it could turn a swift profit in the coal business.

Then there’s Sentula, which discovered evidence of massive fraud in its accounts at the beginning of 2008. The fallout from that included the departure of a number of directors, civil and criminal action against various executives – one of whom has “done a runner” out of the country – and a two-month suspension of trading in Sentula’s shares while forensic auditors quantified the damage.

There’s also an investigation under way by South Africa’s Financial Services Board into alleged insider trading in Sentula’s shares by various parties ahead of the announcement of the accounting problems.

Finally, there are environmental issues to be dealt with, such as the opposition to CoAL’s proposed Vele coking coal mine in Limpopo province because of its proximity to the Mapungubwe National Park. That could cause delays to the construction of the mine, where MD Simon Farrell is champing at the bit to get going. He’d hoped for permission to start to be granted by end-June. At best it will now be end-September.

Farrell, who is a blunt Aussie, sounded off about the delays in January at the McCloskey SA coal export conference in Cape Town when he demanded South Africa’s bureaucrats “get off their bums”.