INSIGHT
SELF-FUNDING KEY
IN COAL SECTOR
Edited by Leon Louw
As banks retreat from financing coal projects around the world, self-
funding has become key in the coal sector, Vuslat Bayoglu said at a coal
symposium last year.
V
uslat Bayoglu, managing director of mining
investment company Menar, has stressed the
importance of reinvestment of income from
existing operations to fund growth in light of the
reluctance of South African commercial banks to fund
coal-related investments.
Bayoglu was among the speakers at a Coal Symposium
held in the coal mining town of Middleburg in
Mpumalanga, South Africa last year. The gathering,
attended by representatives of coal mining and related
industries, discussed the importance of mining to the
South African economy.
Bayoglu spoke on entrepreneurship in coal mining. He
shared his personal experiences of growing his company
from a single operation to seven and several other pipe-
line projects that will result in 20-million tonne per annum
production by the second half of 2020. This growth in
12 years has been made possible, he said, by continuous
reinvestment of proceeds – a strategy he follows as
the business grows through green-field projects and
acquisitions.
"Coal has a long
and illustrious history of
providing energy stability and
is anticipated to play a key role in
the global energy mix for many
generations to come according
to energy analysts.
The latest green field project to be completed is Khanye,
a comprehensive colliery that produces 200 000 tonnes
per month in Bronkhorstspruit. Khanye, which falls under
Canyon Coal, boasts a processing plant and a recently
completed rail siding. The result of about R600-million
worth of investment, the mine was opened by Mineral
Resources and Energy Minister Gwede Mantashe in
November 2018.
In terms of acquisitions of existing operations, Bayoglu
cited Zululand Anthracite Colliery (ZAC), an underground
operation Menar purchased from Rio Tinto in 2016 and
turned around into a sustainable business. He had to
www. africanmining.co.za
African Mining Publication
“Khanye was built from our cash reserves. We believe in
reinvesting money back into the business. This is good
because banks do not want to fund coal,” he said.
Financial institutions are not that eager to finance large coal mining
operations any longer.
African Mining
African Mining January 2020
57