IPSA.L Share News (IPSA)

AIM-quoted South Africa-based coal miner Strategic Natural Resources (SNR) has questioned whether South African power generator IPSA has the right to terminate their coal supply agreement. SNR says it has not received any notice of termination from the IPSA subsidiary that signed the contract. This did not stop the SNR share price falling 2p to 16.75p. AIM-quoted IPSA says that it cannot proceed with its agreement with SNR's 74%-owned subsidiary Elitheni to acquire 1m tonnes of coal a year for 20 years because of delays in signing up customers for the power from the proposed power plant at the mine mouth site at Indwe. IPSA blames delays in Eskom's Multi-site Baseload Independent Power Production Programme for this. This termination announcement follows the removal of IPSA boss Peter Earl from the SNR board earlier this week because of a conflict of interest. Earl asked for a vote of confidence and all the members present voted against him. Elizabeth Shaw, who is SNR's finance director and a director of IPSA, remains on the board for the time being. IPSA says that it still has an option over the Indwe site and plans other power plants in the Eastern Cape. However, it needs to agree sales contracts for the power before going ahead with the developments. SNR says that it is already talking to other potential customers for its coal. SNR has received the feasibility study for the Elitheni coal mine and a full update will be given before the end of October.