South African firm MC Mining has completed the previously announced acquisition of two properties, which gives the company key surface rights required for its Makhado hard coking and thermal coal project.
Carried out by MC Mining subsidiary Baobab Mining & Exploration, the transaction involved the purchase of the Lukin and Salaita properties for R70m ($4.8m).
First announced in November last year, the acquisition was subject to the Limpopo Province regional land claims commissioner approval.
The commissioner did not oppose the deal during the legislated 30-day notification period, following which the properties were legally transferred to Baobab.
MC Mining CEO David Brown said: “The acquisition of Lukin and Salaita completes the suite of surface rights required for our flagship Makhado Project and the initial tranche of the purchase price was settled using internal cash flows.
“The transaction will facilitate the commencement of the final geotechnical drilling and related studies required for the sitting of the mine’s infrastructure.
“In parallel, we continue to progress offtake negotiations for the balance of the Makhado coking and thermal coal as well as discussions with potential funders.”
Baobab has already paid the first tranche of R35m ($2.5m) to the seller. The remaining part of the consideration will be paid within three years before the first anniversary of coal production from the properties and conclusion of a potential land claims and expropriation process.
Located in the Limpopo province of South Africa, the Makhado Project will produce 2.3Mtpa hard coking coal and 3.2Mtpa thermal coal.
The life of the mine is estimated to be 45 years.