Coal miner MC Mining’s 70%-owned Uitkomst colliery has procured a revolving asset facility from South African financial institution Absa Bank.
Uitkomst intends to use the facility to finance the acquisition of new underground mining equipment following the transition to owner-operated mining at the colliery on August 1.
The rolling five-year R15-million facility is subject to a floating coupon at the South African prime rate of 10% a year plus 0.5% and is secured by the acquired mining equipment.
Earlier this year, Uitkomst acquired independent mining contractor Khethekile Mining’s business operations at the colliery for R65-million.
The underground mining operations had previously been undertaken by Khethekile and, under the terms of the sale of business agreement, Uitkomst acquired all of Khethekile’s mining equipment, including conveyor systems as well as coal mining and transportation equipment.
“The Absa facility reflects the growing confidence that financial institutions have in MC Mining and the execution of our strategy,” CEO David Brown commented on Thursday.
He added that the acquisition of new mining equipment and the integration of the recently acquired underground mining operations will result in improved equipment availability and contribute to the production enhancement initiatives at the colliery, which Brown noted will ensure that Uitkomst is “positioned to benefit from prevailing higher international coal prices.”