News blog
Strategic Natural Resources
- BY: Andrew Hore |
- POSTED: 22/10/2010 |
South Africa-based coal miner Strategic Natural Resources has been hit by Aim-quoted South African power generator IPSA’s decision to terminate its coal agreement.
This follows the removal of IPSA boss Peter Earl from the SNR board earlier this week because of a conflict of interest. Earl asked for a vote of confidence and all the members present voted against him. Elizabeth Shaw, who is SNR’s finance director and a director of IPSA, remains on the board for the time being.
Shares in SNR fell 2p to 16.75p each, which values the company at £15.8m.
IPSA says that it cannot proceed with its agreement with SNR’s 74%-owned subsidiary Elitheni to acquire 1m tonnes of coal a year for 20 years because of delays in signing up customers for the power from the proposed power plant at the mine mouth site at Indwe.
IPSA says that it still has an option over the Indwe site and plans other power plants in the Eastern Cape. However, it needs to agree sales contracts for the power before going ahead with the developments.
SNR has received the feasibility study for the Elitheni coal mine and a full update will be given before the end of October.
On 15 October, Sterling Trust increased its stake by 3m shares to 7.97%.
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