South African coal supplier Seriti Resources has acquired a majority stake in renewable energy company, Windlab Africa at a cost of $51 million.
The acquisition will grant Seriti Resources majority ownership of the company’s 3.2 GW renewable energy portfolio, enabling Seriti Resources to transition into an energy company on the back of a diversified energy portfolio.
The transaction is expected to be completed in early 2023, pending Competition Commission and South African Reserve Bank approvals are secured.
With the acquisition – conducted through Seriti Resources’ clean energy unit, Seriti Green, established in 2021 – Seriti Resources will hold a 51% share in the company, with Windlab Managing Director, Peter Venn, holding 15%; Rand Merchant Bank and Standard Bank holding 14.5%, respectively; and Ntiso Investment Holdings holding 5%.
“The introduction of renewable energy into Seriti’s existing portfolio of high-quality coal assets will provide long-term financial stability and diversification whilst embracing alternative energy sources and helping to secure the country’s power needs,” stated Mike Teke, CEO of Seriti Resources.
The first project on the horizon following the acquisition is Windlab’s 450 MW, R12 billion Mpumalanga wind farm. Located in the province with the highest concentration of South African mines, the high wind potential and grid-ready region offers significant opportunities for wind project take off.
While the demand for coal in South Africa remains high – with the resource accounting for 80% of the country’s electricity supply – Seriti Resources is committed to managing a just transition to a low-carbon economy while maintaining coal production. According to Teke, “We need to be moving towards a lower-carbon future through investing capital from coal into green energy. It is not only the right thing to do, but it makes business and societal sense.”
Currently, 80% of the 50 million tons of coal the company produces is sold to South Africa’s state utility, Eskom, and despite the acquisition, this will remain unchanged. Rather, Seriti Resources is focusing on low-carbon production, with the company remaining “committed to coal, we will run those assets.”
Seriti Resources currently uses approximately 750 GWh of electricity across its mining operations. With the acquisition, new forms of clean and reliable electricity will be connected to operational mines, improving production while reducing emissions.