JOHANNESBURG (miningweekly.com) – ASX-listed Universal Coal has, through a 49% owned subsidiary, entered into an agreement to buy Exxaro Coal’s North Block Complex assets, in Mpumalanga.
Universal and joint venture partner Ndalamo Resource have recently established a new company North Block Complex Proprietary Limited (NBC) to acquire the assets from Exxaro. NBC will be managed by Universal.
The fully operational North Block Complex was acquired by NBC for about A$18.6-million.
The acquisition follows Universal’s strong performance in the six months to December 31, which resulted in a 124% year-on-year increase in revenue to A$136.5-million, and a reduction in net debt from A$14.7-million to A$6.7-million.
The North Block Complex is an opencast operation located in proximity to South African State-owned utility Eskom’s Arnot, Tutuka and Komati power stations. It has historically achieved average run-of-mine (RoM) production of about 3.5-million tons a year over the past four years with sales of about 2.7-million tons a year.
Historical production from the North Block Complex was primarily sold into the domestic power station market, with a small amount of higher-value-sized product sold to traders.
Universal on Thursday noted that it plans to convert the North Block Complex into a multiproduct operation with the inclusion of the adjacent Paardeplaats project, pending relevant regulatory approvals and permits.
The company noted that the transaction is consistent with its diversification strategy and meets acquisition criteria of being immediately or near-term earnings per share accretive.
The acquisition is expected to be finalised towards the end of this year.
Universal also owns and operates the Kangala and New Clydesdale mines, in Mpumalanga.