Johannesburg, South Africa — MININGREVIEW.COM — 20 August 2008 – London Mining Plc – a UK-based company that is developing mines for the steel industry – has acquired a 50.5% share of DMC Energy – a restructured subsidiary of Johannesburg-based Delta Mining Consolidated (DMC).
A news release issued here revealed that the US$120 million (R900 million) deal would be implemented in phases, subject to receipt of South African regulatory approvals. The first tranche – a subscription of US$35 million (R262 million) for 28% of new shares in DMC Energy – was expected in October 2008. This would be followed by the additional subscription tranches in due course. The remainder of the shareholding in DMC Energy would be held by DMC.
Following reorganisation by holding company Delta Mining Consolidated, DMC Energy will hold 70% of Ashante Mineral Resources, which owns the Rietkuil coal project.
The release added that the investment by the London-based group would enable a bankable feasibility study to be completed for the project. It was believed to have up to 288 million tonnes of coal deposits, and would be able to supply two major Eskom power facilities at Kendal and Grootvlei. Mining was expected to commence next year, following completion of an independent resource statement later this year.
London Mining managing director Christopher Brown commented: “This acquisition will form the basis of London Mining’s new Coal Division, which we hope to grow rapidly in the future.”
The group will also have a 30.35% stake in DMC Coal Mining, which has coal and torbanite prospecting interests in the provinces of Limpopo, and Mpumalanga. The Limpopo project is under exploration with indications that it presents potential for a 425 million tonnes in situ resource of metallurgical and thermal coal.
The release went on to point out that DMC also intended to expand additional coal exploration assets in Botswana, Zimbabwe and Swaziland. These assets would be transferred to DMC Energy after registration was complete, and all coal projects developed by DMC would in future be developed through DMC Energy.