Optimum Coal Mine Business Rescue – Financial model
The Optimum coal mine, which supplies Hendrina power station, went into business rescue in 2015. This placed the coal supply to Hendrina at risk. Eskom was entering into negotiations with the business rescue practitioners to resolve the financial arrangements, including a price for the coal supply, to enable the continued operation of the mine.
Meridian was tasked with developing a financial model of the mine, in conjunction with a mining engineering consultant. The aim of the model was to calculate the price for the Eskom coal that would enable the ongoing viability of the mine under different stochastically generated coal market and macro economic scenarios, and mine production configurations.