South Africa: Mike Teke South Africa's Charismatic Mining Tycoon

18 September 2022

Mike Solomone Teke, the chief executive of Seriti Resources, often tells his daughter jokingly that the time he could have gone fully vegan is when he was growing up.

During his formative years in Kwa Thema, which is a township in Gauteng in a district called Ekurhuleni, Teke says he and his family would eat pap (a stiff porridge made from maize flour) with spinach and other vegetables. This was on occasions when there was food in the Teke household.

The mining tycoon says that there were times during his household when they would go hungry and recounts that it was a luxury to have pap and eggs. There were few options back then. It leaves little to the imagination to surmise that Teke's background is humble.

  • Mike Teke, the chief executive of Seriti Resources, had humble beginnings but now sits atop a multibillion-rand coal mining and energy company.
  • Seriti Resources, of which Teke and three other individuals are founders, was created through the purchase of Anglo-American thermal coal assets. These lucrative coal assets were appealing because they are tied to long-term coal supply agreements with South African power utility Eskom.
  • Teke, through Seriti Resources, has been growing the company's portfolio of businesses. In 2021 the company purchased the coal assets of South 32 Limited and recently set up Seriti Green, a renewable energy business with an ambitious goal to generate 3.5 GW of clean energy.

This same background is a far cry from where the self-made man is now. In 2011 at the Top Empowerment Awards, Teke's fortune was estimated to be in the region of ZAR 684 million. Using 2011 exchange rates, this translates to about US$ 100 million.

Teke is now the chief executive of coal mining and green energy outfit Seriti Resources, which was created through the purchase of Anglo American's thermal coal mines. The product from these coal mines is dedicated to feeding South Africa's thermal power stations are secured through long-term supply contracts.

The remainder of Anglo's coal assets were demerged from the group and bundled into a new company called Thungela Resources Limited. This strategy in coal mining circles is called "mine to mouth" and is being continued by Seriti. Eskom, South Africa's power utility, has an agreement where its thermal power stations are fed with coal from the company's Kriel and New Largo mines. These mines are adjacent to the power stations.

Seriti Resources (the company's name is from the native Sotho language and means integrity) was formed in 2017. Mike Teke, through his investment vehicle Masimong Holdings Group owns 25% of Seriti Resources. The remainder of the shares in the energy company is owned by Sandile Zungu's Zungu Investments Company, Thebe Investments Corporation, and Community Investment Holdings.

Teke has been busy expanding Seriti's portfolio of businesses and mines. In May 2021, Seriti announced that it would acquire the coal assets of South 32, another mining company that had taken the decision to exit its coal operations as part of its mission to reach its net zero goals.

The acquisition of South32 SA Coal Holdings Proprietary Limited means that Seriti now owns 7 coal mines. Seriti CEO Mike Teke said of the transaction: "The closure of this transaction is a significant milestone for Seriti and our employee and community trusts. It will secure a sustainable, reliable, and cost-effective coal supply solution to Eskom and, at the same time, bring opportunities for further synergies and optimization within Seriti. This further demonstrates our commitment to South Africa and the industry."

  • Seriti Resources is the result of a partnership between Masimong Holdings Group which is Teke's investment vehicle, Zungu Investments Company, Thebe Investment Corporation and Community Investment Holdings.
  • Seriti Green will be a game changer for Seriti Resources as it pivots into renewable energy, betting ZAR 75 billion (US$ 4 billion) in the process.
  • Teke is acutely ambitious and has plans to not only list Seriti Resources but also to grow it into a diversified mining company to rival Anglo American.

Seriti Resources, in a surprising and somewhat ironic move, announced that it was moving into the renewable energy space through the creation of a subsidiary called Seriti Green. The company plans to spend no less than ZAR 75 billion (US$ 4.27 billion) on wind farms. It is envisaged by the company and its executives that the company will generate 3.5 GW of power. Mike Teke and Seriti Resources are playing the long-term game in renewable energy. The wind farms that Seriti Green will be building are expected to be complete by 2030. According to the mining industry news website Mining MX, these wind farms will be in the Mpumalanga province of South Africa.

The company is already building the first wind farm in that province at a cost of ZAR 12 billion (US$ 683 million). The publication said the rest of Seriti Green's capital will be invested in east Africa.

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Seriti, according to Mining MX, is also buying a 51% controlling interest in Australian firm Windlab Africa at a cost of R892m. Windlab MD Peter Venn will become an individual investor in the new company holding 15%, while the other partners are Rand Merchant Bank (14.5%), Standard Bank (14.5%) and Ntiso Holdings (5%). Compared to its peers in the coal mining sector, Seriti Resources is making a serious pivot into the renewables space.

Other coal miners have made inroads into the renewables space but not in the way that Seriti has. Exxaro Resources, the largest coal miner on the JSE, has joint venture arrangements with partners to create a renewable outfit with the capacity to generate 300 MW of power. This is a minnow compared to Seriti's overall mission to create a renewable energy unit with the capacity to generate 3.5 GW of power.

This is no mean feat. To call it ambitious is an understatement. Ambition is a hallmark of the personality of the company's founder and chief executive. Mike Teke, through his leadership, has managed to make a strong imprint of his personality on the company. In 2017 just after the formation of Seriti Resources, he declared that his ambition was to become as big as Anglo American.

He also announced in 2018 that he had plans to list Seriti on the JSE in 2 years. COVID may have thrown a spanner on those plans, but Teke puts his money where his mouth is if his ZAR 75 billion investment in renewables is anything to go by. Teke is a self-confessed workaholic who his grandmother raised in modest circumstances. He attributes much of the disciplines that have made him the success he is today to his grandmother.

In a televised interview, he famously declared that no one has ever died from hard work. He shared his "secrets of success", which include getting up early, working hard, pursuing your passion, and being relentlessly focused.

The life of Mike Teke

He was born on the 15th of August 1964 and obtained a Bachelor of Arts degree from the University of Limpopo and an MBA from the University of South Africa. He is a past president of the South Africa Chamber of Mines. He began his career as a teacher and then moved on to human resources with various companies in South Africa, ending up in the mining industry. Teke has gained much of his wealth through the coal industry, having bought Optimum Coal and four other investors in 2008.

He is an active philanthropist who mentors young people giving each one an hour a week of his time.

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