CoAL CEO David Brown
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Triple-listed Coal of Africa Limited (CoAL) on Tuesday said it was evaluating a number of opportunities to acquire a cash generating asset.
“We continue to engage with potential funders to ensure any potential opportunity can be appropriately funded. We are aware of the current cash balances and the requirement to fund the last legacy liability in June 2017,” it said in a statement on Tuesday, adding that it was in discussions to ensure the payment of this liability could be funded while also having sufficient funding available to move ahead with the Makhado project.
CoAL said the 26-month construction phase of the project, in Limpopo, is expected to start this year, as soon as all regulatory approvals are in place.
The project is currently in limbo, following the suspension of its 20-year integrated water use licence (IWUL) last year. The IWUL was suspended after the Vhembe Mineral Resources Forum lodged an appeal to the Department of Water and Sanitation (DWS).
CoAL, led by CEO David Brown, was now awaiting final decisions on its appeal to the DWS and the Water Tribunal.
“This delayed start-up reflects the complex environment in which South African mining companies operate. We remain committed to ensuring that the requisite processes are completed as efficiently as possible,” CoAL added.
Meanwhile, it noted that the interim court interdict to halt any mining or construction activity at the site still remained in place. Subsequent to this, the environmental approval for the Makhado project was transferred from CoAL to Baobab Mining and Exploration, the operating entity for the Makhado project in July 2016 by the Department of Mineral Resources and the Limpopo Department of Economic Development, Environment and Tourism.
“The validity period for the start of activities was also further extended for an additional five years. This authorisation is fully executable and will facilitate the start of the Makhado project upon resolution of the IWUL,” CoAL said.
Post construction, a further four-month ramp-up phase at Makhado would result in the production of 5.5-million tonnes a year of saleable product.
CoAL in December 2015 launched a takeover bid for fellow South African coal miner Universal Coal; however, after months of negotiations, the deal lapsed in July 2016.