[miningmx.com] – EXXARO Resources has inked a deal to use the technology of Australian-listed Linc Energy that will enable it to supply energy from underground gas resources in sub-Saharan energy.
The South African group, which mines coal, and has investments in iron ore and mineral sands, will pay Linc Energy a total of A$27m (R255m) comprising the non-exclusive use of its technology and for delivery of the first project in which Linc Energy will have a 15% stake.
Linc Energy also has the right to take a non-controlling 49% stake in projects identified by Exxaro Resources while it will take royalties from gas produced and sold by Exxaro Resources’ projects.
“Reaching this milestone opens the door for the teams to commence with the detailed project work to monetise the inherent value we believe is contained in this clean coal technology,” said Sipho Nkosi, CEO of Exxaro Resources.
In 2011, Linc Energy bought 9.6% of JSE-listed Firestone Energy which has coal resources in South Africa’s Limpopo province that could yeild gasification potential, a deal Peter Bond, Linc Energy’s CEO, described as “a classic investment” at the time.
Commenting on the transaction with Exxaro Resources, Bond said: “This is a substantial strategic move by Linc Energy to add Africa to its global portfolio to roll-out UCG [underground coal gasification] as an alternative and complementary energy solution”.
