JSW takeover of CIC hits new hurdle

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[miningmx.com] — CIC Energy Corp said the Botswana government had declined to renew one of its two mining licenses there.

This can potentially derail a buyout of the Canadian coal miner by Indian power utility JSW Energy Ltd.

CIC’s shares fell 16%.

The company said it was discussing the new developments in Botswana with JSW Energy, and the deal will not go through unless the latter waives a license renewal condition.

Last November, CIC had agreed to a C$422m, or C$7.42 a share, buyout offer from JSW Energy, subject to its getting both its Mmamabula East and Mmamabula South mining licenses renewed in Botswana.

The buyout offer comes at a time when Indian firms are scouting coal assets overseas to fire up power plants at home, looking to benefit from the energy-hungry nation’s aim to halve its nearly 14% peak-hour power deficit within two years.

JSW Energy has an operational capacity of 995MW and plans to increase total capacity to 11,390MW by 2015.

The Botswana government renewed CIC’s licence for the Mmamabula East prospect, but said renewal of the license for Mmamabula South, already renewed twice, was at its discretion.

CIC said it has requested for a reconsideration. CEO Warren Newfield said: “Although we are obviously disappointed … we believe that the loss of Mmamabula South will not have a material impact on the company’s mining plans.”

Estimated mineral resources at Mmamabula East and South mines are about 2.3 billion tonnes and 311 million tonnes respectively, the company said in a statement.

CIC Energy could not be reached over the telephone.

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