Coal of Africa (CoAL) is set to sell the Mooiplaats Colliery in Mpumalanga Province, South Africa, to a consortium of investors in order to focus on the development of Makhado project.
The divestment is valued at R179.9m ($13.22m). CoAL and its wholly owned subsidiary, GVM Metals Administration (South Africa), as well as its black economic empowerment partner Ferret Mining & Environmental Services, have signed a sale of shares and claims agreement with Mooiplaats Coal (MCH) and Mooiplaats Mining.
Under the agreement, CoAL and Ferret will sell 100% of their shares in Mooiplaats, while the CoAL Group, comprising CoAL and GVM, will dispose of their respective claims against Mooiplaats and Langcarel, which is a subsidiary of Mooiplaats and owns the colliery.
CoAL CEO David Brown said: “The sale of the Mooiplaats Colliery is the final step in the company’s balance sheet restructuring strategy setting the course for CoAL to become a self-sufficient mid-tier coal mining company.
“The disposal will yield annual operational cost savings of approximately $1.4m and the aggregate proceeds of approximately R179.9m will be used to settle Ferret, our Mooiplaats black economic empowerment partner, funding for further development of the flagship Makhado Project or the potential acquisition of a cash-generating asset.
“The sale also frees up valuable in-house human resources, facilitating additional focus on Makhado, ensuring the asset can be brought to production optimally.”
Located in Ermelo coalfields, the colliery is a thermal coal asset that was placed under care and maintenance in October 2013 due to a reduction in global prices from 2013 and increasing logistics costs.
Completion of the transaction is subject to the fulfilment of certain conditions.