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Johannesburg - Keaton Energy on Wednesday pointed to its Vanggatfontein flagship colliery in Mpumalanga as it achieved record cash generation from operations in the third quarter to December 31, with Eskom thermal coal sales of 531 386 tonnes. Keaton Energy's Vanggatfontein colliery produces thermal coal for supply to Eskom and metallurgical coal for supply to domestic industrial consumers.
But the production of 5-seam metallurgical coal was stopped during the quarter due to poor market conditions.
Keaton said it initiated more profitable alternatives for utilising the 5-seam plant, including the commencement of a 12-month toll washing contract.
However, Keaton's Vaalkrantz colliery in KwaZulu-Natal remains on care and maintenance awaiting Section 11 Ministerial Consent for its sale.
Keaton placed Vaalkrantz colliery on care and maintenance in May last year in a bid to minimise losses exacerbated by the on-going global decline in coal prices and the unavailability of water due to the continued drought in the region.
This also led to Keaton's wholly-owned subsidiary Leeuw Mining and Exploration, which managed Vaalkrantz, to embarked on a Section 189A process for the retrenchment of all employees.
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Mandi Glad, Keaton chief executive, said it was disappointed with the slow process of approving the Section 11 Ministerial Consent for the sale of Vaalkrantz colliery.
"Section 11 consent was applied for on 9 May 2016," Glad said.
"It is disappointing to note that this has still not been granted notwithstanding the new owner's commitment and ability to re-open the colliery and generate much-needed employment opportunities in an already deprived area."
Glad also said the immediate forecast was to grow production at Moabsvelden pit in Vanggatfontein colliery.
"As is usual, our long life Vanggatfontein colliery has performed consistently and continues to generate excellent production and cash flow numbers," Glad said.
"Growth via the adjacent Moabsvelden remote pit remains a high priority for the group in the short term."