South African coal miner Universal Coal has entered into a sale of prospecting right agreement with South African coal major Exaaro to acquire the Arnot South project.

The Arnot South project is a multiple seam deposit that hosts three of the coal seams (No. 4, 3 and 2) typically present in the Witbank coal field
The Arnot South project is a multiple seam deposit that hosts three of the coal seams (No. 4, 3 and 2) typically present in the Witbank coal field

Exxaro established that Arnot South was no longer strategically aligned with its group strategy and embarked on a public disposal process, with Universal Coal being the successful bidder.

Located within the Witbank coal field – South Africa’s most important source of thermal coal – Arnot South has been subject to several drilling campaigns since the 1970’s by major companies including Gold Fields and most recently Exxaro.

“The acquisition of Arnot South increases Universal Coal’s thermal coal resource base by 25%, further strengthening our position in the Witbank coal field,” Universal Coal CEO Tony Webber says.

With Kangala having achieved steady state operations at 2.8 Mtpa run-of-mine (RoM), and the about 2 Mtpa RoM New Clydesdale Colliery expected to be in full production in the latter part of this year, Universal Coal is now pursuing coal ventures capable of supporting larger (over 3 Mtpa), longer-term operations.

“Arnot South not only meets this requirement but also hosts excellent quality coal that allows processing flexibility and offers coal product optionality, says Webber, adding that acquisition marks another step towards growing the company into a sustainable mid-tier coal producer in the medium-term.

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