As a 100% black-owned mid-tier coal producer, Ndalamo Resources focuses on investment opportunities in the South African mining sector. TARREN BOLTON speaks to Executive Director and CEO, SHAMMY LUVHENGO, to find out more about the company’s environmental goals for coal production in South Africa and its role in shaping the future for coal mining, as well as its plans for growth and diversification strategy.
Ndalamo Resources was established in 2013 by amalgamating various mining and financial sectors with sustainable, socially responsible professionals and entrepreneurs. Today, the company has evolved from an investment enterprise to a fully operational coal producer.
The company began with the acquisition of New Clydesdale Colliery from Exxaro; it then became the partner for Universal Coal. Strategically, the two companies decided to consolidate all black economic interests within one, eventually emerging as Ndalamo Resources.
In addition, the company has majority direct interest in North Block Complex, Ubuntu Colliery coal assets and holds a 100% interest in Springboklaagte (a fully authorised Greenfields project). In the 10 years since it was founded, the company has established itself as a significant player in the mid-tier sector, focusing on creating sustainable value for all its stakeholders by acquiring assets in the coal sector that could be operated profitably and sustainably.
“Our acquisition strategy has been successful, and we will build on this to support growth in the future,” says Luvhengo.
In transitioning to a low-carbon economy, the role of the coal mining industry is both pivotal and transformative. “It is imperative to recognise that our industry holds a significant position in this shifting paradigm,” says Luvhengo.
Luvhengo believes that despite its challenges and criticisms, coal mining remains an essential component in the global energy mix. Ndalamo’s commitment to sustainability, innovation and responsible mining practices can contribute to the shift towards a more sustainable and environmentally conscious future. “Amidst the urgent need to reduce carbon emissions, the coal mining industry has a unique chance to pioneer transformation,” he says.
“As we stand on the cusp of a new era, our focus must not solely dwell on the immediate transition away from coal but on leveraging innovation and technology to mitigate its environmental impact. We have an opportunity and responsibility to spearhead change in a sector that has traditionally powered economies worldwide.”
Luvhengo adds, “We must explore cleaner coal technologies, invest in carbon capture, utilisation, and storage (CCUS), and diversify our energy portfolio towards renewable sources while ensuring a just transition for the communities reliant on coal mining. Our company’s growth strategy affirms our commitment to fostering innovation and reshaping the trajectory of the coal mining industry towards a more sustainable and vibrant future.”
Building and maintaining healthy relationships with key stakeholders in the coal ecosystem will be crucial. “We will persistently generate valuable knowledge and prospects to unlock the complete commercial potential across our value chains and discover and adopt new and improved methods and approaches which will include exploring alternative logistic solutions and leveraging new value extraction technologies. To ensure efficient distribution, we aim to develop a sustainable logistics solution for coal transportation.”
Luvhengo says that Ndalamo Resources will continue to seek out new acquisitions that provide synergies with their existing resources to create value.
“Continuous improvement to our asset portfolio will enhance our competitiveness in the market, and we will strive to create a diverse portfolio of quality assets, allowing us to adapt to changing market demands. We will become more rigorous in selecting new assets, develop a clear exit strategy to determine when it would be appropriate to walk away and ensure a higher level of responsiveness to the market,” he says.
Diversification While the company will continue to focus on coal, over the next 10 years, it aims to diversify into new areas, with 60 to 70% of its business to remain in coal.
“The dynamism of the mining landscape demands adaptability and foresight. While coal mining remains integral to our operations, we recognise the imperative to diversify into other minerals and alternative energy sources. This strategic shift is not just a response to market trends but a proactive step in contributing to Africa’s sustainable energy transition. We are actively exploring opportunities in renewable energy and other minerals, paving the way for a diversified and resilient future.
“We have developed a comprehensive plan to select the right commodities. This means focusing on identifying commodities that demonstrate resilience and long-term potential, taking into consideration market dynamics and future demand. This will ensure that our diversification efforts are aligned with sustainable growth prospects.
“Our growth and diversification strategy includes establishing a renewable energy arm of Ndalamo Resources called Ndalamo Energy – as part of our commitment to reducing our carbon footprint and minimising our reliance on external energy sources by investing in independent renewable energy production. To achieve this, we have outlined a strategic plan to acquire and/or develop renewable energy assets, such as solar or wind farms, which will allow us to generate clean energy internally. This will not only contribute to reducing our carbon emissions but also provide a more sustainable energy source for our operations.
“As part of our long-term strategy, we aspire to market and supply energy to Eskom or other key stakeholders over time. By doing so, we not only reduce our own carbon footprint, but also contribute to the broader shift towards renewable energy in the region. This approach aligns with our commitment to sustainable practice and ensures a more secure and environmentally friendly energy supply for our operations,” explains Luvhengo.
Luvhengo says, “Our strategic pillars – sustainability and ESG, growth and diversification and operational excellence – are not merely guiding principles but fundamental catalysts driving our endeavours in shaping a new narrative for mining in Africa.
“We are developing the criteria and guidelines for investment, including robust ESG considerations. This framework will ensure that our investments adhere to responsible and ethical practices. Furthermore, we are in the process of developing a diversification strategy that includes a pipeline and roadmap for funding purposes. This enables us to systematically evaluate and prioritise potential opportunities, ensuring a structured and strategic approach to diversification.
“We firmly believe that sustainability and responsible mining practices form the bedrock of a thriving and ethical mining industry. We are committed to operating in harmony with the environment, prioritising the welfare of communities and upholding the highest standards of governance. Our dedication to ESG principles ensures that every facet of our operations integrates sustainability, fostering a positive impact that extends beyond profit margins,” concludes Luvhengo.
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