WESCOAL said its joint venture at Arnot Colliery in Mpumalanga province was “under investigation” and declined to make further comments following an article at the weekend alleging financial malfeasance.
Citing a preliminary report by Sizwe Ntsalubagododo Grant Thornton, an auditing firm, the Sunday World said Arnot Opco was in “disarray” and had been subject to financial mismanagement by senior staff, including the mine’s CEO, Bontle Aphane. It went on to say there were questionable procurement, staffing, and shift practices at the mine.
“The alleged matter relating to mismanagement at Arnot Opco is currently under investigation and until such time the investigation is concluded, Wescoal will not be making any further media statements on this matter,” said Wescoal.
Wescoal, which holds an indirect 50% interest in the mine, said it had invested “a significant amount into the re-establishment of the mine”. The mine was mothballed by Exxaro Resources and then resuscitated through the efforts of former employees who currently hold shares in the company.
Arnot Opco has a 10-year coal supply agreement with Eskom.
The Sunday World said R40m was spent by Arnot Opco management on consultants and Covid prevention activities without any controls. Contractors were also paid more than they had invoiced; in one case, a company had been paid R2.4m more than was agreed.
A further R3.8m in capital was spent but the auditor could not find evidence that it was for services rendered. Service providers were also owed more than R130m.
Said Wescoal: “As a listed entity, Wescoal is committed to the strictest principles of good governance and holds Arnot Opco to the same standards. Any breach of these principles and standards is taken very seriously”.
“Key stakeholders and the media will be invited in due course to witness the momentous supply of coal to Eskom’s Arnot power station through a conveyor belt,” said Wescoal. “The success of Arnot will be a positive example of what a public and private company, employees and the community can achieve through collaboration,” it said.
