R5.5bn financing secured for Boikarabelo mine

LEPHALALE – It appears to be all systems go for the finalisation of construction on the long-awaited Boikarabelo mine near Lephalale after Resource Generation (Resgen) announced that it had secured a R5.5 billion rand loan last week.
According to a statement, Resgen was able to secure credit approval from members of a financing syndicate consisting of Rand Merchant Bank, Noble Resources, the Trading Group, the Industrial Development Corporation (IDC) and the Public Investment Corporation (PIC).
“This is an extremely important milestone towards the construction and commissioning of the Boikarabelo mine, which will be the second largest in the Waterberg region and will have a marked impact on the opening up of the Waterberg coalfield,” said Resgen CEO Rob Lowe.
Although construction valued  $200 million has already been completed. Funding for the $400 million balance was halted two years ago leading to the ousting of Resgen’s then-predominantly Australian board. “The Australian focus was not aligned with the local funders,” said Lowe in an interview with Miningmx published on 8 August 2016 (Resgen scores coup for Limpopo with R5.5bn Boikarabelo funding).
“We could not amend the project plan to meet local requirements. And as the coal price fell, the debt capacity was also falling but management was reluctant to adjust the project make-up.”
According to the article, Resgen updated and changed the mining plan and execution strategy.
 About 60% of the coal mined at Boikarabelo will be exported but the plant can be adjusted to allow for more domestic supply with Eskom being the most likely buyer.
There are also plans to establish Resgen as an independent power producer (IPP) in South Africa.
“We have to be ready to participate in the second window of the coal-fired IPP,” said Lowe referring to the South African government’s plans to attract 2,500MW of power from coal-fired projects in a number of bidding windows.
The second window could be open this time next year while the mine should be completed by September 2018 and the first saleable production in the last quarter of 2018.