Riversdale Coal and Forbes & Manhattan, two coal mining companies with ties to South Africa, have recently settled a year-long dispute related to a canceled acquisition agreement.
The cancelation by Forbes of the agreement to buy South African mining company Riversdalestemmed from Forbes's belief that a Riversdale mining operation, Zululand Anthracite Colliery, in South Africa, was performing poorly. Based on this assessment Forbes subsequently determined Riversdale had breached certain contractual obligations of the acquisition agreement prompting a written cancellation of the deal, according to Steel Guru.
The two companies have announced a settlement by way of the ZAR45.5 million (US$ 4.2 million) deposit held in escrow, including interest, being shared between the parties. Riverdale will receive ZAR19.4 million (US.1.8 million) with the balance going to Forbes.
Meanwhile, coal continues to become a scarcer commodity in South Africa as the nation continues its struggle to meet rapidly growing energy demands. South Africa is now faced with the challenge of ensuring supply for existing coal-fired power plants as well as new coal-fueled mega-projects currently under development by Eskom, the supplier of approximately 95 percent of country’s power.
"I don't think there is nearly enough attention being given to the supply of coal for Eskom," said Mike Rossouw, chairman of the Energy Intensive Users Group, which represents heavy power users such as mines and factories. "That's an area government needs to do more work on."