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Coal junior snaps up coal export entitlements
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11th February 2009
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CAPE TOWN (miningweekly.com) - Emerging coal miner Coal of Africa has snapped up a large coal entitlement at the Matola port in Mozambique and strategic access at the port of Richards Bay in South Africa.

Coal of Africa CEO Simon Farrell told the Mining Indaba in Cape Town on Wednesday that his company had secured entitlement to 13 million tons of the total of 16 million tons at the expanding Matola port in Maputo.

He said that, with shipping company Grindrod, Coal of Africa had also acquired strategic access to the port of Richards Bay through the dry bulk facility.

He said that the company had secured a million-ton-a-year allocation from the Matola coal terminal in Mozambique, which currently had the capacity of four million tons of coal a year.

"But importantly we have the rights to the 100% of any expansion of Matola," Farrell said.

The upgrade the Matola port capacity to six million tons by August next year was on the cards and the company had begun a scoping study to build an adjacent new facility that would have the capacity of ten million tons a year.

That would give Matola a total capacity of 16-million tons, of which Coal of Africa would have entitlement to 13-million tons, Farrell said.

JSE-listed Coal of Africa's first revenue would be generated this year, he said, from Mooiplaats thermal coal-mine next to the Camden power station at Ermelo in the Mpumalanga province.

The company, which he said had no debt and A$174-million in cash, would be operationally cash positive by ear-end.

The company produced both thermal and coking coal and its other two coal businesses were in the Limpopo province.

It was fully funded through the initial development of Mooiplaats and the first phase of its first Vele coking coal project in Limpopo.

The company planned to be in production at Vele, near the Botswana border, this year and there was a possibility that a fraction of the middlings would be exported.

It had signed a letter of intent for the offtake agreement with its major shareholder ARcelorMittal for the coking coal at a minimum of 2,5-million tons a year and an ArcelorMittal option to take that up to five-million tons a year.

It had awarded a mining contract to MCC, which would provide all the capital equipment and Coal of Africa would pay for the wash plant.

 

 

Edited by: Creamer Media Reporter

 

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