THE Hong Kong listed Kinetic Development Group (KDG) has completed the takeover of ASX and JSE listed coal producer MC Mining in which it now holds a 51% stake following finalisation of the second tranche of the $90m deal on April 22.
MC Mining is now pushing ahead with development of the Makhado metallurgical coal project in Limpopo Province which KDG says will be developed from a “long-standing development asset into a producing cash-generative metallurgical coal operation of regional significance”.
According to an MC Mining statement, a further capacity expansion programme at Makhado will target total production of 800,000 tons per year of hard-coking coal and 700,000t/year of thermal coal.
“This positions MC Mining as a meaningful new entrant in the global seaborne metallurgical coal market,” the company said.
The statement added that, “as an established profitable coal producer with a long track record of safe, large-scale mining operations in the People’s Republic of China, KDG has provided MC Mining with access to industry-leading mining technologies, management capabilities and procurement and supply chain efficiencies that have the potential to unlock efficiencies in the construction and accelerated commissioning of the Makhado project.
“The board believes that, with the KDG subscription now complete and KDG firmly established as the company’s strategic partner, MC Mining is well positioned to deliver on its growth strategy.”
MC Mining said last month it had temporarily suspended mining and processing operations at its Uitkomst Colliery near Utrecht in Kwa-Zulu Natal citing “operational underperformance and cash losses experienced at the operation”.
The suspension was “intended to be a care and maintenance measure and does not represent a permanent closure of the mine; a relinquishment of the mining right nor a decision to place the operation in liquidation or business rescue”, the company said.
MC Mining intends evaluating strategic options for Uitkomst including engagement with interested third parties regarding potential partnerships, joint operations or other strategic arrangements, it said.
