JOHANNESBURG, November 2 – Australian mining company Coal of Africa (CoAL) on Thursday completed the selling of its mothballed Mooiplaats Colliery in Mpumalanga for an aggregate purchase price of R179.9 million.
The Mooiplaats Colliery is a thermal coal colliery situated in the Ermelo coal fields, with an underground single-seam mining asset that still has at least 45 million mineable tonnes of coal in situ.
Last month, the CoAL group, as well as its BEE partner Ferret Mining & Environmental, entered into a sale of shares and claims agreement with a consortium of investors, Mooiplaats Coal Holdings (MCH), to sell Mooiplats Colliery.
The completion of the transaction resulted in the payment of the initial tranche of R67 million of the purchase price, being R52 million to the CoAL group and R15 million to Ferret in full and final settlement of their equity.
The balance of the R112.9 million purchase price will be settled in not more than ten quarterly instalments, with the first Deferred Payment anticipated to be due in August 2018, nine months after the closing of the transaction.
“The sale of the Mooiplaats Colliery concludes a process that commenced during 2013 and is the final step in CoAL’s five-point turnaround strategy,” chief executive David Brown said.
“It is a significant achievement for the company and required coordination and completion of multiple transaction work streams.”
CoAL has always said that the funds received from Mooiplats sale will be used to support its project pipeline, in particular the development of its flagship Makhado hard coking coal project or potentially contribute to the acquisition of a cash generating asset.
In addition, Brown said the sale of Mooiplaats was expected to yield annual overhead savings for CoAL of U.S.$1.4 million, an important factor in CoAL’s strategy of becoming a self-sufficient mid-tier coal miner.
– African News Agency (ANA)