Jeremy Metcalfe and the coal fired future for Strategic Natural Resources

Wednesday, Mar 16 2011 by
8
Jeremy Metcalfe and the coal fired future for Strategic Natural Resources

The small township of Indwe, 1,000km east across sparse South African landscape from Cape Town, holds more than a little romance for Jeremy Metcalfe. For the co-founder and communications director of AIM listed Strategic Natural Resources (LON:SNRP) the town is home to a project that promises to establish the company as a major coal producer in the country. However, look closer at the grid of streets that traverse Indwe and one name will stand out. It’s the road that leads from the proposed mouth of the Elitheni coal mine all the way to the railway line that will eventually ship coal away from the project. It’s called Metcalfe Street. Sir Charles Theophilus Metcalfe, a great friend of Cecil Rhodes, built that railway line and it turns out that he is, indeed, one of Jeremy’s ancestors.

The Elitheni coal project is a world away from Metcalfe’s first dalliances in the mining industry. Many years ago he brokered the sale of the Gwynfynydd Gold Mine in Wales – a deal that brought him in to contact with, and later the chairmanship of Irish mining group Minmet. A string of successes there ultimately culminated in disappointment for shareholders and, as Metcalfe says, “the buck stopped with me”. Despite being bruised by the experience he bounced back by teaming up with SNR chairman Richard Latham and former Minmet director Peter Earle and together they began scouring the world for a new project. What they eventually found was father and son team Barry and David Nel, who had been piecing together a coal exploration project in the Eastern Cape but had run short of money. They agreed to reverse into SNR and the new group began trading on AIM in August 2007.

Under the terms of the original plan, the SNR team wanted to firm up the resource at Elitheni and then supply coal to a planned power station that would be built by Peter Earl’s AIM and Johannesburg-listed IPSA Group. The plan remained largely intact right up until October 2010 before the two sides split apart, the off-take agreement was cancelled and Earl left the SNR board. At around the same time it emerged that while South Africa’s flagging power network remained a target buyer of Elitheni coal, there was also latent demand from other countries, particularly in emerging markets. As a result, Metcalfe…

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