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The situation of two junior coal miners in the Waterberg could not be more different.

One, Resource Generation (Resgen) has raised R5.2bn in funding to complete its Boikarabelo mine. The other, Waterberg Coal Company, has warned it will have to put its subsidiary, Sekoko, into business rescue if it cannot raise working capital.

Both companies, which have been battling for years to advance coal mines in an area far from ports and with minimal infrastructure, at a time when funders are cautious, have had top-level changes in the past year because of funding issues.

Resgen’s management team was changed after three significant shareholders, the Public Investment Corp (PIC), Altius Investment Holdings and Noble Group, voted out four directors (including CEO Paul Jury) at last year’s annual general meeting.

These shareholders were dissatisfied with progress on raising funds to complete the Boikarabelo mine. Resgen was negotiating with a consortium of banks, which wanted it to consider a contract mining model to cut capital and operating costs, but Jury was against it.

At Waterberg, whose mine is 40km away, CEO Stephen Miller resigned in March after the company failed to seal a deal with Sibanye Gold. His replacement, Mark Craddock, resigned within a month. The company is now run from Australia by director and company secretary Lee Boyd.

Since Resgen’s change of management, negotiations with the banking consortium have been more successful. Last week Resgen said Rand Merchant Bank, the Industrial Development Corp, the PIC and Noble had agreed on terms to lend A$515m to complete Boikarabelo. Export Finance & Insurance Corp (Efic) was also considering joining the financing syndicate. Transnet Freight Rail had helped with a logistical solution to carry the mine’s coal for the domestic and export markets.

Resgen’s new CEO, Robert Lowe, founder of Altius, says this funding will be enough to complete the mine and provide for contingencies. If credit approvals are secured by October, the mine should have its first saleable production by the fourth quarter of 2018.

Lowe says Resgen has a new strategy and mining plan to fit current market conditions, which will reduce the capital and risk by outsourcing construction to external contractors. Boikarabelo plans to produce 6Mt/year of saleable coal in the first stage for offtakers already signed up, expanding to 12Mt/year of saleable coal within three years. These are the original targets, but capital costs have been reduced by R3.2bn: R1.8bn on not buying a mining fleet but using contractors; R900m on the coal handling plant; and R500m on ancillary costs. Bids are being evaluated for a mining contractor.

Waterberg is not making the same progress. While work on Resgen’s Boikarabelo has already begun, the Waterberg coal mine is still revising its feasibility studies.

The shares have been suspended from trade since March because of ongoing discussions to raise funding and failure to publish its interim report to December.

Waterberg’s latest announcement was that AME International, which has been considering recapitalising Waterberg’s balance sheet and providing working capital to advance the mine, has proposed extending a loan to the operating subsidiary, Sekoko Coal, in return for a 20% stake.

Waterberg says if there are further delays in refinancing Sekoko, it may have to go into voluntary business rescue, which would have ramifications for Waterberg because this is its major asset. It was in discussions for short-term financing to avoid this.

At the end of June, Waterberg was A$1,000 overdrawn.

Waterberg has spent about seven years and R1bn on planning its mine, which would have three legs: up to 4Mt/year of export coal, up to 10Mt/year of coal for Eskom, and developing an independent coal power station, which would use surplus or waste coal from the other two activities.

Seaborne thermal coal prices firmed at about $2/t last week, according to SP Angel’s daily report, as China announced plans to cut 500Mt of production over the next three to five years.