Johannesburg — COAL of Africa (CoAL) confirmed yesterday that it had finalised the R467m acquisition of junior miner NuCoal Mining, after fulfilling the suspensive conditions to the share sale agreement signed in October.
MD Simon Farrell said the acquisition would transform CoAL into a multiple project producer by adding five existing and future operations.
The company is listed in London, Australia and on the JSE but its key mines are in SA - at Mooiplaats in Mpumalanga, and Vele and Makhado in Limpopo.
NuCoal is a thermal coal producer with assets close to CoAL's Mooiplaats mine.
NuCoal's Woestalleen Colliery, which produces 2,5-million tons a year of saleable coal for domestic and export markets, has a number of off-take contracts in place.
NuCoal has two beneficiation plants, one fully operational mine producing 350000 tons a month of run-of-mine coal and has recently started production at a second mine. In addition, NuCoal has a number of other development projects which CoAL will evaluate as part of the company's overall strategy.
"The acquisition of NuCoal cements CoAL's position as an emerging South African coal producer, transforming the company into a multi-site producer, well placed to take advantage of the current strength in, and attractive outlook for, global coal markets," Farrell said.
CoAL said the acquisition was funded by proceeds of a share placement in October, which raised R731m before costs. CoAL will use the remaining proceeds of the placement to fast-track capital expenditure at its Vele coking coal project and for general working capital.
In October CoAL announced plans to move its listing in London from the AIM growth market to the main board next year. "Recognising the growing size of the company and its mining assets, its predominantly London-focused institutional investor base and share trading liquidity, a move to the main market (is) the logical next step in CoAL's development trajectory," it said.
The company has said its Vele and Makhado coking coal projects were expected to start production in the first half of this year and the fourth quarter of 2011 respectively, producing a total annual output of 10-million tons of coking coal.
It would initially produce up to 1-million tons of coal a year from its Vele project, and would supply steel maker ArcelorMittal SA and export markets. This would be increased to 5-million tons.
CoAL has increased its stake in Vele to 80% and will take full ownership of the project once the new-order mining right is granted.
Production at the Mooiplaats thermal coal mine started in 2008 and the company has railed and sold the first coal from the mine.
