South Africa’s Seriti Resources said its multi-product operations at Middelburg Mine Services (MMS) and at Klipspruit South-East pit together with related opencast activities (Klipspruit Opencast) are not currently commercially sustainable and require material restructuring to improve unit costs and the prospects of future sustainability. Moreover, these mines, which export coal through Richards Bay are adversely impacted by Transnet’s inability to provide consistent rail service from the mines to the port and market volatility.
The company announced plans to lay off more than 1,100 workers across MMS, Klipspruit operations and its corporate services team which is to be re-sized to service a smaller base of operational mines.
“We recognize that this exercise will negatively impact our workforce and local communities,” said Mike Teke, CEO of Seriti Resources. “We have not taken this step lightly. We will continue to engage openly and constructively with our employees and organized labor to ensure the best outcome for all concerned.”
Seriti acquired MMS and Klipspruit from South32 in June 2021. MMS is a large-scale dragline complex, supplemented by truck-and-shovel operations. MMS employs more than 3,700. Klipspruit uses truck-shovel operations to mine coal with the dragline performing reclamation in the main pit, which was mined out in Q2 FY21. This operation employs nearly 1,500.
Seriti said it remains fully committed to honoring its coal supply obligations to Eskom, inland customers and the export markets.
