Creditor wants Minergy under judicial management
Mbongeni Mguni | Monday June 2, 2025 10:22
Whilst details on the identity of the creditor were not available at press time, industry insiders indicate the difficulties may have to do with the current or former mining contractor. The funds paid to the mining contractor constitute the highest operating costs for mines such as Minergy’s Masama Coal Mine.
Directors at the troubled operation confirmed the latest developments in an update to Botswana Stock Exchange investors.
“The company hereby informs shareholders that its wholly owned subsidiary, Minergy Coal (Proprietary) Limited, is contesting a legal matter with a third party who has petitioned the High Court of the Republic of Botswana to have MinCoal placed under judicial management. “MinCoal has filed an answering affidavit opposing the petition and is taking all necessary steps to safeguard the interests of the company and its shareholders. “Accordingly, shareholders and investors of the company are advised to exercise caution when dealing in the company’s securities until the matter has been resolved,” directors said.
Typically, creditors petition the High Court for processes such as judicial management and liquidation when they believe there are declining chances that their debts or similar commitments will be made by the company. Creditors may also seek the High Court’s intervention if key payment obligations are missed, which triggers concerns around the company’s ability to maintain a going concern status.
If the High Court agrees with the petition, it will appoint a judicial manager who will take over all the affairs of Minergy Coal and plot a way out of the financial challenges.
Whilst Minergy officials were not reachable as at press time, the coal company has battled significant financial and operational instability in the past two years.
From a record-breaking 2022 in which global coal prices soared due to the energy crisis caused by Russia’s invasion of Ukraine, Minergy and other producers entered a downturn in 2023.
As global coal prices fell, these challenges were worsened by rail export difficulties in South Africa, resulting in Minergy and other producers competing for the same, small inland market.
“The biggest challenge or shock is the inability of the Southern African market to take out its export coal to the port because of Transnet issues,” Minergy Ltd acting CEO, Matthews Bagopi told BusinessWeek previously. “Coal that usually goes to export is now inland and that creates pressure on prices where for the first time in decades, these have dropped.”
Operations at Masama stopped for several months in 2023 after the then-contractor, Jarcon, put tools down citing mounting arrears and a payment dispute. Minergy subsequently terminated the agreement and signed up with a new contractor, Meropa Resources.
This week on social media, a post allegedly emanating from Meropa Resources employees, alleged that workers had not been paid for two months due to financial challenges at Masama.
Minergy has been heavily supported by government and quasi-government entities, receiving funding from the Minerals Development Company Botswana (MDCB), Botswana Development Corporation (BDC) and the Botswana Public Officers Pension Fund, over the years.
Last month, government converted a total of P716 million held in debt instruments to equity in Minergy. The debt had been built up through loans advanced to Minergy by the MDCB and the BDC.
From its initial loan in 2019, MDCB advanced P636 million to Minergy over the years, while BDC lent P80 million.
Under questioning on Monday at the Public Accounts Committee, the Minerals and Energy permanent secretary, Pelaelo Khowe, hinted that the Minergy investment was one of the MDCB’s investment missteps over the years.