December 03, 2008

Scharrig & Merafe form coal JV

It is reported that South Africa Junior coal mining group Scharrig and ferrochrome producer Merafe Resources have entered a 50:50 JV called Merafe Coal. The deal will result in the two firms combining their Mpumalanga coal resources. Merafe Coal will start with a coal deposit of 11 million tonnes, which could be mined in a year.

As per report the JV plans to get up to 1 million tons of coal production in future, which will be sold to Eskom.

Mr Steve Phiri CEO of Merafe said the company looked into a joint coalmining venture and found Scharrig to be a suitable partner. He said the venture was looking out for acquisitions and joint venture opportunities in anthracite and coal.

Scharrig is mainly involved with opencast mining and rehabilitation. Its major clients are BHP Billiton and Exxaro Resources. Scharrig reported that its revenue increased by 121% to ZAR 1.4 billion in the year to March. The group's open cast coal mining contracts contributed 67% of revenue at ZAR 914 million and exploration drilling the remaining ZAR 293 million.