CoAL fulfills Rio Tinto deal obligations
JOHANNESBURG (miningweekly.com) – Triple-listed Coal of Africa Limited (CoAL) has now fulfilled all its obligations to Rio Tinto Minerals Development and Rio Tinto’s joint venture partner, Kwezi Mining, in relation to the agreements under which CoAL subsidiary MbeuYashu acquired an interest in Chapudi Coal and Kwezi Mining Exploration in 2010.
Under the terms of the $75-million acquisition of the Chapudi assets, which is adjacent to CoAL’s Makhado project, $45-million was paid upfront in cash, with the $30-million balance deferred until the sale had been completed.
Rio Tinto Minerals Development and Kwezi in March last year said CoAL was in breach of the deferred consideration, but CoAL refuted this.
After some negotiating, the parties in May 2016 reached an agreement on the deferred consideration payable by CoAL. This included an increase in the minimum monthly payments from $100 000 to $650 000, as well as payments of $1-million and $2-million on May 15, 2016, and September 15, 2016, respectively.
As planned, all outstanding amounts had been paid to Rio Tinto by June this year.
CoAL CEO David Brown said the final repayment and completion of the Rio Tinto Chapudi transaction was a milestone, as it resolved the outstanding legacy issues which plagued the company for the past five years.
“We continue to focus on progressing our flagship Makhado project,” he added.
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