Firestone Energy and Sekoko Resources have called off their negotiations with India’s Jindal Steel over the development of two new coal properties in the Waterberg area of South Africa’s Limpopo province.

This development followed the Firestone and Sekoko JV in February entered into a non binding MoU with Jindal, whose interest in the projects was based on the Indian giant’s need to secure coal for its power and steel operations in India. It was also considering investing in an independent power generation plant.

Sekoko chairperson Mr Timothy Tebeila said a transaction would have meant an adjustment of the ownership interests in the two properties.

Firestone chairman Mr David Perkins said “The primary focus of Firestone will continue to be bringing the Smitspan project into production to supply coal off take to Eskom and developing the metallurgical coal deposit which we have identified on our southern farms.”

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 58% share in the projects.

The JV in January secured an off take deal with Eskom to supply contract coal to the power utility from April 2012. According to the agreement, the JV would deliver 525,000 tonnes per annum to Eskom until March 2015 and 1 million tonne per annum thereafter for another three years. The parties were continuing to negotiate the further supply of up to 2.3 million tonne per annum until 2032.


(Sourced from miningreview.com)