MC Mining has completed the sale of the Mooiplaats thermal coal colliery in South Africa to Mooiplaats Coal Holdings (MCH) following the receipt of certain outstanding regulatory approvals.
Valued at R179.9m ($12.15m), the transaction was originally announced in October last year.
As part of the sale, the company received an initial sum of R67m ($4.55m) after certain conditions were met in November last year.
MC Mining said: “The timing of the ten equal quarterly payments to settle the remaining balance of R112.9m ($7.66m) was scheduled to commence during August 2018 but was dependent on the Department of Mineral Resources (DMR) approving the requisite Section 102 application to, amongst other things, incorporate certain prospecting rights into the Colliery’s mining right, failing which the payments would be delayed.”
The company has announced that the DMR has given approval to the Section 102 application.
Following the approval, MC Mining has received the first quarterly payment of R11.3m ($0.76m).
MC Mining CEO David Brown said: “The Section 102 approval was the final requirement to complete the Mooiplaats sales process that commenced during 2013 and is another significant step in the clean-up of the Company’s balance sheet.
“The Mooiplaats disposal will result in estimated annual cost savings of R18m ($1.22m) and the quarterly payments will be used to develop MC Mining’s flagship Makhado hard coking coal project.”
The company began the sale process for the Mooiplaats Colliery in 2013 as part of its strategy to restructure its balance sheet and unlock shareholder value.
The Mooiplaats Colliery, which is situated in the Ermelo coal fields, was placed under care and maintenance in October 2013.