Photo by: Bloomberg
PERTH (miningweekly.com) – ASX-listed Universal Coal has signed a deal with South African coal major Exxaro Resources that will transform the junior into a multi-mine coal producer.
The Australian miner has agreed to acquire all the assets and assume certain liabilities of Exxaro’s New Clydesdale colliery (NCC), located adjacent to its own Roodekop deposit, for an undisclosed sum.
Universal CEO Tony Weber said on Tuesday that the acquisition of the NCC marked a “major step forward” to becoming a midtier coal producer, and expedited the development of the company’s second operation immediately on the heels of commissioning its Kangala mine. Kangala is to produce 2.1-million tonnes a year of thermal coal in the first half of 2014.
“Our Roodekop deposit contains an 84-million-tonne coal resource, 82.9-million tonnes of which is measured and is awaiting only the granting of a water use licence before development activities can commence,” said Weber.
He added that in combination with NCC’s established operation and infrastructure, the path forward to bringing the Roodekop mine on stream had been fast-tracked.
The NCC has one of the oldest mines in the country, and has been operational, sporadically, since 1949.
Exxaro had been looking to divest of the project since April last year. The mine was placed on care-and-maintenance in December.
“NCC has been generating a negative-margin and the life of the mine has shortened beyond the profile that suits Exxaro’s investment profile. However, under the new ownership of Universal Coal, further opportunities can be extracted through exploiting synergies with its contiguous operations,” Exxaro said in a statement.
NCC, near Emalaheni, in Mpumalanga, includes an extensive resource base, a coal beneficiation facility with a capacity of about two-million tonnes a year, and came fully equipped with mining machinery and infrastructure.