South African coal company Thungela Resources expects to assume operational control of the Ensham coal mine around the end of this month.

Idemitsu Kosan announced in February that it was selling its majority stake in the Emerald coal mine to the Sungela consortium comprised of Thungela Resources (75 per cent), Mayfair Corporations Group (12.5 per cent) and Audley Energy (12.5 per cent).

Thungela said today that Ensham would be acquired at a cost of about R4.1 billion (about $336 million) and this investment had strong potential for a short payback period.

“Thungela will assume operational control of the Ensham business following completion of the transaction, which is expected on 31 August 2023 given that all key regulatory conditions precedent have now been met, with only a few commercial conditions (such as the transfer of material supplier contracts) yet to be concluded,” a company update stated.

“A comprehensive roadmap has been prepared to ensure alignment in terms of priorities, governance and other aspects of integration.”

Thungela described acquisition of the bord and pillar mine as the first milestone in a geographic diversification strategy which aimed to further enhance the resilience of its portfolio.

The large, high-quality asset provided Thungela with entry into the southern Bowen Basin in Queensland, a leading mining jurisdiction, with mature and well-established infrastructure, it said.

It has Federal Environmental approvals for an extension project to take operations out until 2037.

The Ensham coal mine is 85 per cent owned by Idemitsu, with the remaining 15 per cent owned by LX International through its subsidiary Bowen Investment.

The operation produced approximately 3.2 Mt of high-quality, low-ash and low-sulphur thermal coal in 2022.