An interesting read out today!Jindal weighs up Waterberg...

An interesting read out today!

Jindal weighs up Waterberg options
Andr? Janse van Vuuren | Wed, 09 Feb 2011 13:52

[miningmx.com] -- INDIA'S Jindal Steel is weighing up at least three possible opportunities that may flow from its negotiations with Sekoko Resources and Firestone Energy.
Sekoko and Firestone are joint venture partners in the development of two coal properties in Limpopo's Waterberg area.

Sekoko chair Timothy Tebeila said on Wednesday Jindal?s interest in the projects is based on the Indian giant?s need to secure coal for its power and steel operations in India.

It could also provide expertise in the development of the project, and might consider investing in an independent power generation plant. The latter would depend on the finalisation of the integrated resource plan, which in its current draft makes no provision for coal-generated independent power until 2028.

Jindal is the third-largest Indian steel producer in terms of tonnage.
Firestone and Sekoko announced last week it entered into a non-binding memorandum of understanding with Jindal to negotiate an exploration and drilling programme for one of the joint venture?s Waterberg properties.

"At Jindal?s election it may require Firestone and Sekoko to enter into a joint venture to develop a mine," read the statement. "If Jindal elects to proceed with the development of a mine, there will be an adjustment in the ownership interests."

At present, Sekoko holds a 40% interest in the JV with Firestone holding the remaining 60%. However, Sekoko also holds a 38% stake in Firestone, giving it an effective share of 58% in the projects.

ESKOM OFF-TAKE AGREEMENT
Sekoko secured an off-take supply deal with Eskom end-January to supply contract coal to the power utility from April 2012.

According to the agreement, Sekoko would deliver 525,000 tonnes per year to Eskom until March 2015, and 1,000,000t thereafter for another three years.

The parties are continuing to negotiate the further supply of up to 2,300,000t per year until 2032.
The coal would be mined at the Smitspan open pit mine, another Waterberg property.

In December, the Industrial Development Corporation committed R249m to fund Sekoko?s contribution to the development of the Waterberg coal projects in exchange for a 33% share in

Sekoko?s stake.
David Knox, a director at BBY Ltd which acts as a corporate adviser to Firestone, said the group would probably fund its contribution with a combination of equity and debt.

?We have strong institutional interest in the project,? he said.
http://www.miningmx.com/special_reports/conf_cover/2011/mining-indaba-2011/Jindal-weighs-up-Waterberg-options.htm