HomeEnergy MineralsPossible takeover of CoAL

Possible takeover of CoAL

Simon Farrell,
Managing Director,
CoAL
 
Johannesburg, South Africa — MININGREVIEW.COM — 21 May 2009 – Emerging coal development and production company Coal of Africa Limited (CoAL) – listed on the AIM, the Australian Securities Exchange and the JSE – says shareholder ArcelorMittal South Africa Limited – a unit of the world’s largest steelmaker – may make an offer to take over the company soon.

“ArcelorMittal South Africa may make its bid once Coal of Africa obtains permits for its Vele project,” managing director Simon Farrell told reporters in London. He said Coal of Africa expected to obtain the permits in the third quarter.

Required capital expenditure on the Vele project will be close to US$400 million (R3.6 billion Farrell revealed. The latest resources statement shows the Vele resources at 133.8Mt measured, 76.6Mt indicated and 131.5 Mt inferred.

Asked if ArcelorMittal intended to own Coal of Africa, Farrell said: “based on discussions we’ve had with them, the company may make a bid.”

ArcelorMittal South Africa Limited – the Johannesburg-listed unit of ArcelorMittal – paid US$48 million (R404.5 million) for 16% of Australia-based Coal of Africa last month to increase control over raw-material supplies. Its so-called cash cost to make a metric ton of hot- rolled coil – a benchmark steel product – rose 59% last year as prices for coal, scrap metal and alloys increased.

ArcelorMittal South Africa spokesman Sven Lunsche said he couldn’t comment. He added that the steelmaker might make a statement later.

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