London, England — MININGREVIEW.COM — 02 June 2010 – Another listed junior coal mining company is investing in Mozambique’s huge Moatize coal field, but it is buying out the interests of the country’s pioneering coal operator which has lost patience over the pace of development.
A company statement issued here said AIM-listed Beacon Hill Resources was purchasing Minas Moatize for US$35 million (R262.5 million) in cash, plus the acquisition of US$5 million (R37.5 million) in outstanding loans. The deal had been struck in January subject to various conditions precedent, and had been finalised last month.
Minas Moatize was owned by AMCI Capital – a private equity house specialising in energy and resource investments – which is run by Hans Mende and former BHP Billiton executive director Mike Salamon.
The company owns the only operating coal mine in Mozambique, while it is also a minority 5% partner with giant Brazilian resources group Vale, which is ploughing billions of dollars into developing a huge export coking coal mine at Moatize.
According to AMCI executive Egon Mauss the decision to sell out had been taken because of logistical constraints and other factors affecting the development of coal businesses in Mozambique.
Mauss first sounded a strong note of caution on the development of Mozambique’s coal reserves in October 2008, when he warned specialist coal industry newsletter McCloskey’s Coal Report (MCR) about the severe logistical constraints in the country that would hamper the planned flow of export coal.
Mauss commented at the time: “On paper it all looks possible but in reality it is very different. In time, Mozambique will have a viable infrastructure able to export tens of millions of tonnes of coal, but it’s going to take 10 to 20 years to put it in place. It is not going to happen in my working lifetime,” he added.