Global mining company BHP Billiton said it will sell an 8% stake in its South African coal unit to a consortium led by the Pembani Group for an undisclosed sum.

The equity interest in BHP Billiton Energy Coal South Africa (BECSA) will be transferred to the Pembani group, following into a black economic empowerment (BEE) transaction agreement.

The consortium, which includes a broad-based BEE grouping, will effectively be an 8% share holder in BECSA.

BHP will also provide a loan to Pembani which will service their loan commitment from the normal dividends paid by BECSA to its shareholders.

The South African mining charter requires local mining companies to have a 26% BEE ownership by 2014, to redistribute wealth to those disadvantaged under apartheid.

The charter calls for withdrawal of operators’ mining rights should they not meet the requirements. An employee share ownership plan (ESOP) has been approved by BECSA shareholders, which will now be implemented.

Participating employees will hold a beneficial interest of 2% in the firm, thereby enhancing BECSA’s BEE credentials, according to ESOP.

BECSA said the completion of the transaction and introduction of ESOP were both conditional on the company receiving consent from Eskom. The company also needs to satify certain other minor technical conditions.

The Eskom approval is in line with a previous coal supply deal between the two parties for the supply of coal to the Duvha power station.

The company told Bloomberg: "In terms of the agreement, Becsa requires Eskom’s consent to effect a change in the shareholding of Becsa, as well as to a change in the structure of Becsa’s guarantor."

Currently, BECSA is engaged in negotiations with Eskom to procure the necessary consents which will enable a change in the structure of its guarantor and shareholding.

BECSA operates three collieries in the Mpumalanga coalfields: Khutala, Klipspruit and Middelburg Mine Services in South Africa.