Coal of Africa and its wholly owned subsidiary, GVM Metals Administration, as well as its BEE partner Ferret Mining & Environmental Services enter a sale of shares and claims agreement with Mooiplaats Coal Holdings (MCH) and Mooiplaats Mining.
In terms of the sales agreement, Coal of Africa and Ferret will dispose of 100% of their shares in Mooiplaats and the Coal of Africa Group will dispose of their respective claims against Mooiplaats and Langcarel, the owner of the Mooiplaats thermal coal colliery and a wholly-owned subsidiary of Mooiplaats.
The shares and claims in Mooiplaats will be sold to MCH, a consortium of investors, for an aggregate purchase price of R179.9 million.
MCH members comprise young black professionals, future Mooiplaats Colliery employees, communities, To The Point Growth Specialists and experienced coal mining executives, including Don Turvey.
The consortium is funded by the newly established Last Mile Fund created by Africa Rainbow Capital, Bernard Swanepoel, Sipho Nkosi and Clinton Halsey, and MCH’s structure is compliant with the proposed requirements of the currently suspended third version of the South African Mining Charter.
In delivering on the company’s strategy of restructuring its balance sheet and unlocking shareholder value, Coal of Africa embarked on a formal sale process for the Mooiplaats Colliery during 2013.
This Transaction concludes the process and the proceeds of the purchase price received by the Coal of Africa Group will support the company’s project pipeline, ensuring it is well positioned to deliver on its flagship Makhado project.
The Mooiplaats Colliery is a thermal coal colliery situated in the Ermelo coal fields, adjacent to the recommissioned
Camden Power Station operated by state power utility Eskom.
The underground Mooiplaats Colliery was developed by Coal of Africa from an abandoned box-cut in early 2008 with the first coal extracted in Q3 CY2009.
Mining was undertaken by a contract miner until June 2011 and, following an operational assessment, Coal of Africa retained the existing workforce and equipment, and commenced operating the mine.
The reduction in global thermal coal prices from 2013 and rapidly increasing logistics costs resulted in the
Mooiplaats Colliery being placed under care and maintenance in October 2013, and this status continues to
Feature image credit: Wikimedia Commons