Keaton Energy’s bid part of plan to upgrade yearly coal production

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A miner of coal based in South Africa took a step toward its drive of producing 5 million tons per year of the mineral, according to a published report.

Keaton Energy has made an overture for Xceed Resources, which holds stakes in three coal projects in the African nation, Mining Weekly reports. Those projects are Moabsvelden, Roodepoort and Bankfontein, and they have combined total resources of 114.4 million tons.

Moabsvelden is prepared to begin generation late next year and will permit Keaton Energy to ship thermal coal as part of the sector’s export market for the first time.

“This is an exciting opportunity to deliver real value to our shareholders through increased Eskom coal production at a time when the industry is abuzz with Eskom’s impending coal supply shortfall,” chief executive officer Mandi Glad with Keaton Energy said, according to the publication.

The proposed purchase is set to boost its resources of opencastable coal by at least 100 million tons while spurring the reserve of common coal situated among the Vanggatfontein colliery by as much as 44 million tons.

Platts reports the Johannesburg-based firm has issued a takeover offer amounting to $19.6 million in Australian currency for Xceed Resources. Should the proposal go forward, the Australian firm would be removed from the Australian Securities Exchange if its shareholders welcome the Keaton offer of 14 cents per share.

Thus far, managing director Ian Culbert, finance director Frank Belben and non-executive chairman Patrick O’Connor are among additional shareholders of Xceed who amount to 57 percent of the firm’s share capital have demonstrated they are in support of the takeover bid.

The Keaton chief executive officer said about two months ago that the firm was in the midst of pondering four purchases that would develop the production profile. The company purchased the anthracite project Mooiklip earlier this year from BSC Resources.

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