An Australian Government official at Mining Indaba may have blown the lid off a huge unreported coal deal
Tim Treadgold is a Perth-based journalist who has been covering the resources sector for more than 40 years. He writes regular columns for Stockhead and is at Mining Indaba, the Africa’s biggest mining conference, right now.
Government activity more than corporate dominated the opening day of Africa’s biggest mining conference in Cape Town on Monday, including an unusual clue to the outcome of an emerging African deal which will be felt by Australia investors.
Mining Indaba, which routinely attracts a small flotilla of Australian miners, service providers and government agencies, is less buoyant than in previous years but still managed to attract a crowd estimated at 5000 — double Kalgoorlie’s infamous Diggers & Dealers forum, Australia’s biggest mining conference.
Stockhead was a face in the crowd milling around inside the cavernous Cape Town conference centre, but like Diggers the small-company action which can sometimes generate investment ideas was elsewhere – particularly in the bars and restaurants around the city’s Waterfront.
If there was a single Australian-connected incident that might have investment consequences it was at the Australian Government’s “lounge” which this year had a most unusual top (or platinum) sponsor, a South African company called Beryl Coal.
Beryl is not a well-known name in South Africa, and certainly not in Australia. But an Australian Government senior trade official in South Africa, Kym Fullgrabe, said the sponsorship agreement was signed because Beryl was to be the buyer of South32’s South African coal assets.
That’s unusual, because South32 is yet to report the deal.
A spokeswoman for the company at the South32 exhibition said she had no comment to make.
The company’s last official comment on selling its South African coal interests was a note in its December quarterly filed at the ASX on January 17, which said binding bids were expected in the June half-year — a broad time span which could be quite soon or not until June.
Unusual, as it might seem it is possible that the sponsorship by Beryl Coal of the Australian Government’s lounge at Indaba is a pointer to a deal in the wings and one that might land soon with the potential for South32’s shares getting a boost from selling a surplus asset.
There is, of course, another aspect to the Beryl Coal sponsorship of the Australian Government’s exhibition at Mining Indaba and that’s presumed acceptance of a fee by the Australian Government from a coal mining company at a delicate time in the Australian coal debate.
Fullgrabe declined to discuss the nature of the sponsorship or how much Beryl Coal had paid for platinum status, but it is a question which has political overtones.
In the small company space, the Mining Indaba experience of Steven Wetherall, chief executive of Lucapa, was an interesting example of what the event is about.
Wetherall told Stockhead that the primary purpose of Lucapa exhibiting at the Cape Town conference was to get close to government in the countries in which it operates, Angola and the southern African kingdom of Lesotho.
“We do see some investors, but not many,” Wetherall said, “but that’s not the purpose of being here.”
The unspoken purpose of Mining Indaba is for governments to promote their countries as investment destinations or, in the case of countries such as Australia which has a big mining industry, to market the skills and services of Australian companies doing business in Africa.
As is often the case with a big conference, there can be more learned by who’s not there than who is. Chinese companies, or government representatives, were conspicuous by their absence, as was the US.
Names not expected, but present, included Saudi Arabia and Finland. The Saudis are trying to grow their mining industry to balance the country’s giant oil business. The Fins have a deep mining history but are best known now as the manufacturers of advanced mining technologies.
On a personal level, the most prominent (if unseen) Australian was Mark Creasy, the Perth-based gold and nickel exploration billionaire who has a private South African-focused business called White River Exploration which has been set the hard task of breathing new life into the once fabulously-rich Witwatersrand region around Johannesburg.
Perhaps more to report tomorrow after visiting the places where the small companies are – another beer sir?