Back in April 2017 Minergy Limited listed on the main board of the Botswana Stock Exchange (BSE) with the objective of utilising its 100% owned 390-million tonne Masama Coal Project in the Mmambula Coalfield to become a preeminent coal mining and trading company in southern Africa.
As the Company’s Chief Executive Officer (CEO) Andre Bojé successfully steered the Company through its listing and mine development after having conceived a company strategy that has positioned the Company to achieve its objective of becoming a significant player in southern African coal mining and trading. On 14 May 2019, Minergy announced that Bojé would be retiring but importantly that he would remain involved in the company to retain oversight and strategic responsibility for group coal marketing and sales for a period of 12 months.
He will also remain part of the team tasked with ensuring the successful listing of Minergy on the Alternative Investment Market (AIM) of the London Stock Exchange. Boje said: “The project is at a stage where it needs hands on executive attention so it’s the right time to step back” and added that “there is an excellent team in place to progress Masama to where we have consistently believed it should be, one of the leading coal suppliers in the southern African region”.
Mokwena Morulane, Non-Executive Chairperson of Minergy, said that Bojé had been the driving force behind taking the project through a multitude of steps, both regulatory and physical, including the listing on the BSE. “Thanks to this, it is now a viable operating coal mine. Andre’s outstanding management, deep understanding of the coal industry and his tenacity are the reasons why we have a workable project today.” He added that retaining Bojé’s expertise in the business for a period of time will allow a smooth transition and cement the establishment of the Masama Coal Project and CEO succession.
Following this, the Minergy Board has announced that Morne du Plessis has been appointed as CEO designate and will step into the position of CEO on 1 August 2019. An extensive candidate selection process, led by Minergy’s Remuneration and Nomination Committee, included both internal and external candidates, ensuring that the Board was in a position to appoint the most qualified and experienced person to fill the role previously held by Boje.
Mr. du Plessis, currently the Chief Financial Officer (CFO) has extensive experience in southern African coal mining and trading sector, particularly in South Africa. He is a chartered accountant with an MBA from Heriot Watt University in Edinburgh, Scotland and has held top management positions for several coal mining and trading groups, including contract mining and beneficiation service provider Genet SA, junior coal miner Umcebo Mining Group, and Johannesburg Stock Exchange listed junior coal miner and trader, Wescoal Holdings Limited.
Du Plessis has been a Director on the Board of the Minergy since January 2017 and has been an integral part of the operational team that developed the Masama project. Commenting on the new appointment, Morulane said that du Plessis’ extensive experience in coal mining and trading, particularly in southern African but also internationally, and his significant listed public company director experience was a significant factor in the Board’s decision to appoint him as CEO.
“He also has a deep and practical understanding of the requirements to implement a modern mining project, with his tenure as Minergy’s CFO giving him in-depth knowledge of Minergy’s flagship Masama Project, in order to bring it into full production over the coming months.” The commitment to growth within Minergy is further underpinned with several additional appointments having been made recently, including those of Financial Manager Julius Ayo, General Manager of Mining Siyani Makwakwago, and SHE Manager Herbert Kebafetotse.
“I am extremely proud of these appointments for a number of reasons,” said du Plessis, adding that these senior managers are highly skilled, knowledgeable and embrace the Minergy culture of ensuring training across the organisation in order to fulfil the company’s mandate of ensuring a viable coal sector in Botswana.”
“Work is demanding and at the same time very rewarding. I feel that I am part of something big which will create opportunities and transform the lives of many Batswana,” said Ayo. He went on to indicate that that a goal for the finance team is “to ensure the mine remains financially sustainable through effective cost management, disciplined adherence to financial systems, and prudent revenue optimisation”.
New colleague Siyani Makwakwago added to this, saying he believes that the Minergy culture allows people to express their views openly, thereby promoting a diverse approach to resolving any potential issues. “Minergy has afforded me an opportunity to explore my capabilities to the fullest in dealing with varied experiences in a brown field project. Every day is different, interesting and challenging, and I always looking forward to the next day.”
He and the team are looking forward to the day they start feeding coal sustainably and safely through the washing plant and have quality product out through the mine gate onward to customers. SHE Manager Herbert Kebafetotse believes that employees at Minergy have a once in a lifetime opportunity in terms of being part of the construction, commissioning and operation of a potential giant in Botswana’s coal mining history. “The euphoria created by the prospects of bringing an open pit coal mine to its full potential has created a culture of togetherness and team work that will collectively ensure the commissioning and operation of the mine is successful.”
Kebafetotse added that, from a personal perspective, being part of a new operation, with the excitement of starting things from scratch came with a lot of pressure to do so successfully, was what he enjoys most. “From a SHE team perspective, we intend making this the model mine in Botswana by achieving an LTIFR of zero in our first year and thereafter improving on this performance to go beyond the philosophy of ‘zero harm’. To achieve this, we need commitment from all employees, supervisors and managers, and the team is eager to provide a framework for managers to lead the way towards a safe culture at the mine.”
Above and beyond these senior appointments, Martin Bartle, the Managing Director of Minergy Coal (Pty) Ltd has responsibility for the overall performance of the company embracing profitability, mining operations, processing and safety. Minergy has furthermore opened local offices in the villages of Medie and Lentsweletau primarily to ensure that detailed skills audits are conducted and also provide a contact point for various communities to interact with the project. At the moment, of the 246 employees on the mine site, 236 or 96% are Batswana.
Training at the mine site is taking place, mainly through subcontractors, and primarily involving machine operation. “As we transition from the project phase to full production, a vast amount of training will continue to take place and, in this phase, we will really be building coal expertise within Botswana,” du Plessis assured. Bojé said that the company and the mining operation is in good standing and that executive management, as well as mine and technical management, are well equipped to take the project forward successfully.
“I am confident that the operation is in good hands,” he said. In conclusion, du Plessis reiterated Minergy’s ongoing commitment to foster skills development in Botswana, coupled with ensuring the company’s social conscience is directed at uplifting the surrounding villages, such as the recent connection of the local Medie village to the Botswana Power Corporation electrification grid and other planned projects. “This is the right thing to do and we will ensure that we are remembered for our care as well as our knowledge of the coal sector, which we want to ensure remains a skill set that can be sustained in Botswana.”
A squeaky and glittering metaphoric smile was the look reflected from the Pula against the greenback this week and money market researchers lean this on optimism following Monday’s announcement of another Covid-19 vaccine which is said to have boosted emerging market economies.
With other emerging market currencies, the Pula too reacted to optimism and fanfare on the new Covid-19 vaccine against the weakening US dollar which has been losing its shine since the uncertainty laden US elections.
After bouncing back into the Johannesburg Stock Exchange (JSE) last week Friday, following a year of being in the freezer, the Choppies stock started this week with much fluidity.
Choppies was suspended in both the Botswana Stock Exchange and its secondary listing at the JSE for failure to publish financial results. Choppies suspension on Botswana Stock Exchange was lifted on 27 July 2020. On Friday last week, when suspension was being lifted, Choppies explained that this came into fruition “following extensive engagement with the JSE.”
Choppies stock, prior to suspension, hit a mammoth decline in value of more than 60 percent, especially in September 2018. Waking from a 24 month freezer, last week the Choppies share price was at R0.64 and the stock did not make any movement.
However, Monday was the day when Choppies stock moved vibrantly, albeit volatile. Choppies’ value was on a high volatile mood on Monday, reaching highs of 200 percent. At noon, the same Monday, the Choppies share had reached R1.05. Before taking an uphill movement, Choppies stock slightly slipped by 2 cents. But the Choppies share rode up high and by lunch time the stock had reached the day’s summit of R2.00 and that was at 13:30 when investors were buying the stock for lunch.
The same eventful Monday saw gloom on the faces of Choppies rivals, when Choppies gained by 220.31 percent around lunch time its rivals in the JSE Food & Drug Retailers sector were licking wounds. Spar lost 2.94 percent, Pick Pay fell by 2.43 percent, Shoprite 7.52 percent and Dis-Chem 1.98 percent. The only gainer was Clicks by a paltry 0.51 percent.
In an interview with BusinessPost, Choppies sponsors at the JSE PSG Capital Managing Director Johan Holtzhausen explained that the retailer’s stock was in high demand after a long suspension. He said when a company list or a suspension is lifted the market needs to find itself on the pricing of the share.
“Initially when the suspension was lifted there were more buyers than sellers. As far as we could see this created a shortage of shares so to speak and resulted in the price at which the shares traded going to R1.20 and eventually R2.05 before finding its level around R0.80 sent from a JSE perspective.
This is marked dynamics and reflect that there are investors that are positive about the stock in the long run. This is a snapshot over a short period and one requires a longer period to draw further conclusions,” said Holtzhausen in an interview talking about the Choppies stock.
On Monday this week where the Choppies value grew by 200 percent, the stock took a turn looking down, closing the day at R0.87 from a high of R2.00. According to local stockbroker Motswedi Securities on Monday while there was no movement by Choppies in the local stock exchange as the retailer appeared on the board as 141,000 shares traded at P0.60 each.
However in Choppies’ secondary listing the stock price rallied to over 200 percent during intraday trading on Monday before losing steam and declining to around R0.87 share.
Before press yesterday Choppies opened the market with the stock starting the day at R0.80 then went flat for few hours before taking a slide downward, dropping 5 cents in 30 minutes. Choppies then went flat at R0.75 for 50 minutes yesterday before going up at 10:20 am where it nearly recovered the open day price of 80 cents, but was shy of 1 cent. From 79 cents the price went flat until noon.
Competition and Consumer Authority (CCA) has revealed that in its assessment of the Jet take over by Foschini, there were considerations on possible market rivalry and a clash in targeted classes.
According to a merger decision notice seen by this publication this week, high considerations were made to ensure that Foschini’s takeover of Jet is not anyhow an elimination of rivalry or competition or if the two entities; the targeted and the acquiring enterprise serves the same class of customers or offer the same products, to elude the anti-trust issues or a stretch of monopoly.
The two entities are South African retailers whose services stretched to Botswana shores. Last month local anti-trust body, CCA, received an acquisition proposal from South African clothing retailer, Foschini, stating their intentions to take-over Jet.
South African government’s Business Rescue Practitioners earlier this year after finding out that Jet’s mother company, Edcon, is falling apart, made a decision that Foschini can buy Jet for R480 million. This means that Foschini will add Jet to its portfolio of 30 retail brands that trade in clothing, footwear, jewellery, sportswear, homeware, cell phones, and technology products from value to upper market segments throughout more than 4085 outlets in 32 countries on five continents.
However the main headache for the CCA decision which was released this week, is distinguishing the targeted and the acquiring entity businesses and services.
When doing a ‘Competitive Analysis and Public Interest’ assessment, CCA is said to have discovered that Foschini is classified as a “standard retailer” which targets middle-to-upper income consumers and it competes with stores such as; Truworths and Woolworths. The targeted entity, Jet, is on the lower league when compared to its acquirer, it serves customers of lower classes and is regarded as a discount/value retailer targeting lower income consumers or a mass market. This makes Jet to be in direct competition with Ackermans, Pepkor, Cash Bazaar and Mr Price.
“Therefore, a narrower view of the market is that Foschini through its stores trading in Botswana is not a close competitor to Jet. Additionally, there exist other major rivals who will continue to exercise competitive constraints on the merged enterprise post-merger,” concluded CCA this month.
The anti-trust body continued to explain that in terms of the Acquisition of a Dominant Position, the analysis shows that the acquisition of the target business by Foschini Botswana will result in an insignificant combined market share in the relevant market.
This made CCA reach to a conclusion that there is no case of an acquisition of a dominant position in the market under consideration or any other market on the account of the proposed transaction.
What supports the merger according to CCA is that it is in compliance with regards to ‘Public Interest Considerations’ because the findings of the assessment revealed that the transaction is as a result of the need for a Business Rescue by the target enterprise. This is so because in the event that the proposed transaction fails, it will translate into the loss of the employment positions at the target business.
“On that note the Authority (CCA) found it necessary to ensure that the proposed merger does not result in any retrenchments or redundancies. In light of this, the assessment revealed the critical need to protect the employees of the merged entity from possible merger specific retrenchments/ redundancies,” said CCA.
Before making a determination that the recently proposed transaction is not likely to result in the prevention or substantial lessening of competition or endanger the continuity of the services offered in the relevant market, CCA said it then moved into a concern for public interest which is a protection enshrined in the Competition Act of 2018.
CCA’s concern was mostly loss of livelihood or employment by 126 Batswana workers at Jet stores, stating that possible retrenchments or redundancies may arise as a result of implementation of the proposed merger.
Much to the desire of trade union or labour movements in Botswana and across Southern Africa where the Jet stores are stemmed-who also raised concerns about the retail’s workers job security- CCA subjects Foschini to keep the target entity 126 workers.
“There shall be no merger specific retrenchments or redundancies that may affect the employees of the merged enterprises. For clarity, merger specific retrenchments or redundancies do not include (the list is not exhaustive): i. voluntary retrenchment and/or voluntary separation arrangements; ii. Voluntary early retirement packages; iii. Unreasonable refusals to be redeployed; iv. Resignations or retirements in the ordinary course of business; v. retrenchments lawfully effected for operational requirements unrelated to the Merger; and vi. Terminations in the ordinary course of business, including but not limited to, dismissals as a result of misconduct or poor performance,” said CCA.
CCA also orders that Foschini informs it about all the details of 126 Jet employees within thirty (30) days of the merger approval date. CCA should also know information of when Foschini is implementing the merger, within 30 days of the approval date.
Other conditions include Foschini sharing a copy of the conditions of approval to all employees of the Jet or their respective representatives within ten (10) days of the approval date.
“Should vacancies arise in the target, the merged enterprise shall consider previous employment at one of the non-transferring Jet stores to be a positive factor to be taken into account in the consideration of offering potential employment,” said CCA.
According to CCA, in cases of any job losses, for the Authority to assess whether the retrenchments or redundancies are merger specific, at least three months before (to the extent that this deadline can be practically achieved and in terms of the prevailing and legally required employment practices) any retrenchments or redundancies are to take place, inform the Authority of: i. The intended retrenchments; ii. The reasons for the retrenchments; iii. The number and categories of employees affected; iv. The expected date of the retrenchments.