Botswana coal miner, Minergy, has put on hold plans to list on London’s junior AIM stock market as coal prices have tumbled in the southern African market while uncertainty surrounding Brexit has weighed on decision making, the company said on Thursday.
Minergy joins more than a dozen companies that have shelved their stock market listing plans in Europe this year as earlier investor optimism evaporated due to global trade tensions and angst about Britain’s protracted exit from the European Union.
The company, which commissioned its 1.2 million tonnes per annum Masama coal mine early this year, had planned to list on AIM in 2018 but says it will now focus on operations and related efficiencies around the plant and product output.
“Current unfavourable market conditions are making it extremely difficult, with uncertainty surrounding Brexit weighing on decision-making. This is despite successful meetings and roadshows to potential investors in London throughout 2019,” Minergy said.
“Minergy has opted to step back for a few months and wait for more certainty on the way forward concerning Brexit,” added Morné du Plessis, Chief Executive Officer of Minergy.
Minergy said it had also experienced a setback in securing more off-take agreements for its products in the southern African market due to a 37% decline to $57 per tonne in coal prices in the period from February 2019 to August 2019.
Botswana is estimated to hold coal reserves of about 212 billion tonnes, but the country has only two operating coal mines with the 390-million tonne Masama mine being the first privately-owned coal mine.
The other is state-owned Morupule coal mine.