Mining Companies Exploration and Investment News

Coal of Africa, South African mining companies have signed the acquisition of 100 percent of the company NuCoal Mining coal mining. NuCoal Mining is a coal mining company to ZAR650 ($ 84.17 million).

CoAL also said yesterday it would move its listing in London from the AIM growth market to the main board next year as it gears up for its growth strategy. 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 in SA close to CoAL’s Mooiplaats mine. NuCoal’s Woestalleen colliery, which in the year to June produced 2,5 tons of saleable coal, supplies domestic and export markets, with some off-take contracts in place.

MD Simon Farrell said it intended to use the cash from the share placing to fund the NuCoal acquisition, with some of the money used to increase logistics capacity through Transnet Freight Rail and accelerate capital expenditure at Vele and Makhado . The acquisition would transform CoAL into a multiple project producer by adding five existing and future mining operations.

“The resultant raising of CoAL’s profile may facilitate negotiating leverage with suppliers, service providers, customers and authorities as CoAL becomes a producer of scale,” he said.

“The acquisition would, once completed, transform CoAL into a multi-site producer, well placed to take advantage of the current strength in, and attractive outlook for, global coal markets.

“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 of the London Stock Exchange (is) the logical next step in CoAL’s development trajectory.”

CoAL also announced yesterday that it would expand its Makhado coking-coal project area after having entered into an exchange of prospecting rights agreement with joint-venture companies .

Kwezi Mining and Exploration and Chapudi Coal, joint venture companies held by mining giant Rio Tinto and the Kwezi Group of SA, handed over prospecting rights and interests over project areas connected to CoAL’s Makhado hard coking coal project in Limpopo province. In return, CoAL is giving Chapudi prospecting rights and interests over certain other farms in Limpopo.

Farrell said the rationalisation of Rio Tinto and CoAL’s prospecting rights in Limpopo removed a significant commercial hurdle to the establishment of the Makhado hard coking coal project.

“The farm swap, when completed, would result in the creation of a substantial open cast hard coking coal-mining asset,” Farrell said. The company expected the application for a new order mining right to be submitted next year .