Seriti Resources, a key coal supplier to South Africa’s power utility, will buy a majority stake in renewable energy developer Windlab Africa.
The deal worth $55 million will give Seriti a 51% stake in the wind and solar power business, the coal company said. It’s buying the assets through Seriti Green, the clean energy unit it created last year.
The remaining shares will be held by Windlab’s managing director Peter Venn with 15%, Rand Merchant Bank and Standard Bank Group Ltd. with 14.5% each, and Ntiso Investment Holdings owning 5%.
Seriti is “transitioning into an energy company” that’s moving toward lower carbon technology with capital from coal, Seriti chief executive officer Mike Teke told reporters in Johannesburg Monday. As the green unit looks to add renewable stations and power generation, the miner remains “committed to coal, we will run those assets,” he said.
The company has 18,000 employees and contractors. About 80% of the 50 million tons of coal it produces is burned at Eskom power stations to generate most of the country’s electricity, with some of the remainder exported, Teke said in an interview. Private ownership is “working well” and there are no plans to list, he said.
Seriti has grown rapidly in recent years, buying mines from international resource companies including Anglo American Plc and TotalEnergies SE that have curbed their exposure to South African coal. With the renewable deal, the company joins local producers such as Exxaro Resources Ltd that have acquired clean-energy assets.
Both companies last year outlined a plan to shift to renewable projects at their mines, potentially reducing CO2 emissions by as much as 350,000 tons a year for Seriti, more than half of its current emissions, and 130,000 tons a year for Exxaro at its Matla coal mine.
Windlab is overseeing 3.5 gigawatts of renewable energy projects in South Africa and the eastern region of the continent at different stages of development. Teke aims to have the deal concluded by the first quarter of 2023.
Once concluded, Seriti Green will initially focus on developing 450 megawatts of projects planned in Mpumalanga, the province where South Africa’s coal mines are concentrated, Doug Gain, Seriti’s chief financial officer, said at the briefing. The company will utilize 150 megawatts of that generation for itself and find private customers to take the rest.