The wholly-owned coal-mining business of Sasol Limited said the first-phase implementation of its broad-based empowerment strategy entailed the formation of Igoda Coal, an empowerment venture with Eyesizwe Coal, a black-owned mining company.

"As a result of this transaction, the BEE ownership component in Sasol Mining now comprises an estimated 8 per cent," Sasol chief executive Pat Davies said.

Sasol Mining will expedite plans to advance the second phase of its BEE ownership strategy, under which it will achieve about 20 per cent BEE shareholding by 2009 and full compliance with the Mining Charter's target of 26 per cent by 2014.

The company said its future broad-based empowerment ventures will further assist operational capacity building in the mining sector.

"Sasol Mining's intention is to create a new, sustainable BEE entity, which will be involved in selected mining operations.

This entity will preferably include an operational women's group, as well as other broad-based stakeholders."

Eyesizwe Coal's operational expertise will also play an important role in helping Sasol Mining build further capacity with new BEE entrants.

Further announcements are expected this year.

One of the first announcements will be at Sasol Mining equity level.

"The Igoda Coal transaction is just the first phase of Sasol Mining's empowerment commitment to promote BEE in South Africa and supports the tenets and spirit of the Mining Charter," he said.

The Igoda Coal transaction, which had been more than two years in the making, followed just months after the announcement of the R1,5 billion Tshwarisano empowerment transaction in Sasol's liquid-fuels business.

Igoda Coal comprises the full value chain of Sasol's coal-export mining business - the Twistdraai Colliery and beneficiation plant at Secunda in Mpumalanga, the marketing and logistics components of its coal-export business, as well as Sasol Mining's 5 per cent shareholding in the Richards Bay Coal Terminal.

Igoda Coal, worth almost R1,4 billion, will be one of South Africa's largest empowered coal-export companies.

Eyesizwe Coal owns 35 pert cent of the empowerment venture, while Sasol Mining holds the remaining 65%.

Eyesizwe will provide R25-million and Sasol Mining R46-million in equity, with the balance in the form of loans.

Sasol will be providing facilitation and support under its commitment to transformation in the mining industry.

The company will mine, beneficiate, market and supply utility coal for the export market.

It will produce a minimum export production of 3,6 million tonnes a year and supply approximately four million tonnes a year of middlings coal to Sasol Synfuels at Secunda, the world's sole commercial producer of fuel components and chemical feedstock from coal.

Davies said Igoda Coal has about 30 years of coal reserves.

"We are delighted at the formation of Igoda Coal.

This company constitutes a robust and vibrant component of our coal-mining business that embodies the spirit of sustainable transformation.

"For us at Sasol, transformation is a strategic, business and moral imperative.

"BEE is a fundamental prerequisite for South Africa's long-term socio-economic development and sustainability.

"Our recent - and forthcoming - announcements are indications that we are well down the track to creating sustainable broad-based empowerment ventures," Davies said.

Eyesizwe chief executive Sipho Nkosi said in bringing this transaction to fruition, Sasol has once again reaffirmed its commitment to sustainable transformation and economic empowerment.

- Nampa-Sapa

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