CoAL signs MoU with potential investor for Makhado project

CoAL signs MoU with potential investor for Makhado project

Photo by Duane Daws

29th April 2016

By: Anine Kilian

Contributing Editor Online


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JOHANNESBURG ( – Coal of Africa Limited (CoAL) has signed a memorandum of understanding with Qingdao Hengshun Zhongsheng, which has shown an interest in acquiring an interest in CoAL’s flagship Makhado coking coal project, in the Soutpansberg coalfield.

Hengshun had now started a due diligence on Makhado.

Makhado’s 26-month construction phase was expected to start in the first half of 2017, to be followed by a further four-month ramp-up phase. The project would produce about 5.5-million tons of saleable product a year.

An optimisation study and front-end engineering and design (Feed) for the Makhado project was being undertaken by international engineering and project delivery group DRA Project South Africa (DRA), with results expected by the end of May.

The study followed on the original works performed by DRA during 2013.

Meanwhile, CoAL was preparing an urgent representation to Water and Sanitation Minister Nomvula Mokonyane to request that the project’s integrated water-use licence (IWUL) remain in force pending the final conclusion of an appeal by the Water Tribunal.

The 20-year IWUL was granted in January, but suspended in April, following an appeal by the Vhembe Mineral Resources Forum and other parties.

The company remained in discussions with potential buyers of its Mooiplaats colliery, which had been placed on care and maintenance in 2013.

CoAL was also assessing alternative options regarding a transaction at the colliery.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



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