While coal mine developer Resource Generation (Resgen) has made significant progress in finalising a set of common terms with the proposed lenders for the project finance required to build its Boikarabelo mine, in South Africa, these negotiations remain incomplete, Lulamile Xate said in his chairperson’s address at the company’s annual general meeting on Wednesday.
He told shareholders that he would likely provide a further update later in the week.
“I think that it has become clear to everyone who has been involved in our funding process that obtaining funding for a new coal mine, in the current environment, is not an easy task,” he said in his address.
He noted that, in these circumstances, the fact that the company was still continuing with negotiations with the three proposed lenders was “encouraging”.
In parallel with the process being followed to obtain project finance for construction of the mine, substantial progress had also been made with regard to the other pillars of the total funding package, noted Xate.
He informed that the funding negotiations for the rail link from mouth of mine to the main rail network were well progressed and that an international bank guarantee for the ‘yellow goods’ was also close to finalisation.
“Although the latter is the ultimate responsibility of the proposed mining contractor, we have been much involved in that process,” Xate said.
He added that while the process of obtaining project finance for construction of the mine had, at times, been very slow owing to a range of factors, a number of which were beyond the company’s control, it seemed as though the company now had the right momentum to obtain the funding it was seeking for the project.
Xate also acknowledged the continuing support of Noble Group, indicating that its extending a working capital facility to Resgen had provided the financial means to allow the company to continue the pursuit of full funding of the project.