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Universal Coal has agreed to acquire all the assets and assume certain liabilities of the New Clydesdale Colliery (NCC) from Exxaro Resources.

The NCC is situated adjacent to the Universal Coal’s Roodekop deposit in the Witbank coalfield, and has been sporadically operational since 1949, operating as recently as December 2013.

Located near eMalahleni in Mpumalanga province, NCC produced 717,000t of steam coal in 2012, primarily for the export market.

The mine features a resource base, a coal beneficiation facility with a capacity of about two million tonnes per year.

Exxaro started a tender sale process in April 2013 to divest NCC based on its review, which concluded that the mine was not aligned to the group’s strategy.

The company said NCC has been generating a negative margin and that the life of the mine has shortened beyond the profile that suits its investment profile.

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By GlobalData

Exxaro noted that under the new ownership of Universal Coal, further opportunities could be extracted through exploiting synergies with its contiguous operations.

Universal Coal CEO Tony Weber said the acquisition marks a major step torward becoming a mid-tier coal producer, and expedited the company’s second operation immediately after the commissioning of Kangala mine.

“Our Roodekop deposit contains an 84 million tonnes coal resource, 82.9 million tonnes of which is measured and is awaiting only the granting of a water use licence before development activities can commence,” Weber said.

“In combination with NCC’s established operation and infrastructure, the path forward to bringing the Roodekop mine on stream had been fast-tracked.”

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