Triple-listed Coal of Africa Limited (CoAL) is making good progress in re-entering the market as a coal producer, CEO David Brown said in a quarterly update to shareholders on Friday. The company earlier this month announced that it would buy Pan African Resources’ Pan African Resources Coal Holdings subsidiary, which holds a 91% stake in the Uitkomst colliery, in KwaZulu-Natal, for R275-million. The acquisition is considered complementary to CoAL’s developing Makhado project.
During the quarter to March 31, CoAL secured a 20-year Integrated Water Use Licence (IWUL) for Makhado and entered into a R240-million loan agreement with the Industrial Development Corporation (IDC) to advance Makhado’s development.
The validity period for the commencement of activities had also been extended for an additional five years.
Makhado’s 26-month construction phase is expected to start as soon as all regulatory approvals are in place. CoAL is working to secure the surface rights for Makhado.
The mine will produce 5.5-million tonnes a year of saleable product once in operation.
During the quarter under review, CoAL also concluded the sale of Holfontein Investments to Taung Gold and received the final settlement of R25-million post quarter-end.
Meanwhile, Investec’s interest in CoAL has decreased to 5.95% as at March 22, as a result of CoAL’s issuing of shares to Yishun Brightrise Investment and M&G Investment Management in February.
Article originally appeared at miningweekly.com
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