[miningmx.com] — THE deadline to complete Coal of Africa’s (CoAL) $75m
acquisition of Rio Tinto’s South African coal assets has been extended to end-May,
the company said on Monday, allowing for the outstanding Section 11 approval from
the Department of Mineral Resources (DMR).
CoAL CEO John Wallington has told Miningmx the transaction, originally due
for finalisation by Monday, was almost complete. “It’s only a few administrative
functions that remains to be dealt with,’ he said.
The acquisition of Rio Tinto’s Chapudi assets would transform CoAL to become a
substantial holder of consolidated mining and prospecting rights for coking coal in the
Soutpansberg region. The Chapudi assets are adjacent to CoAL’s existing Makhado
project, where the group has already drawn up a draft feasibility study report and
eyes coal production of up to five million tonnes per year. The company is currently
working on the regulatory aspects for the first stage of Makhado’s development.
Wallington said that when Makhado’s feasibility study commenced two years ago, the
conclusion of the Chapudi transaction was not sufficiently advanced to include these
assets in the overall mine design plan. This has now changed, and a detailed review
to evaluate the options arising from the Chapudi transactions was due to be
completed by the middle of the year.
“Chapudi will give us much more optionality and flexibility going forward,’ Wallington
said. “The future mines can have increased scale and an extended life of mine,’
adding that alternative sequencing was also now a possibility.
The company previously announced a black economic empowerment transaction with
Rothe Investments over 26% of the Chapudi assets.
Meanwhile, CoAL continues to talk to Exxaro over the 30% option that the group
acquired in 2009 to take part in Makhado.
“We made a full presentation to Exxaro’s board and we’re now meeting weekly to take
it forward,’ Wallington said. CoAL remains keen for Exxaro to exercise the option in
full, saying it would not only give the project substantial BEE credentials, but also a
partner that understands the dynamics of mining coking coal.
Exxaro has been given until June 15 to make a decision.
In another commercial issue related to Makhado, CoAL said bulk sample tests
conducted by ArcelorMittal SA (Amsa) have confirmed the suitability of the project’s
coal for future use at the steelmaker’s Vanderbijl and Newcastle plants.
Amsa previously provisionally agreed to buy between 2.5 and 5 million tonnes of
coking coal per year from CoAL’s Limpopo operations. It was now conducting tests
similar tests on product from Vele and would, once completed, start discussions over
a permanent commercial arrangement.
