South African miner Coal of Africa (CoAL) announced Monday it has agreed to buy some Rio Tinto coking and thermal coal exploration assets in South Africa including the Chapudi coal project for $75 million.
The Chapudi purchase from joint venture companies held by Rio Tinto Minerals Development and Kwezi Mining, provides CoAL with an additional estimated 1.04 billion mt JORC resource, of which 90 million mt is measured, 220 million mt indicated and 730 million mt inferred, CoAL said. The deal is the culmination of an asset swap agreement ongoing since 2008.
CoAL said gaining resources at Chapudi, in Limpopo province, would complement its flagship Makhado coking coal project.
CoAL said it will retain properties that were to be exchanged with Rio Tinto and Kwezi in accordance with the Rio farm swap agreement, which allowed it to apply for a New Order Mining Right for the Makhado project. The NOMR is the key legal right to develop the project under the mining law, without it nothing can be developed. The company anticipates that Makhado's NOMR application will be lodged before the end of 2010, followed closely by an application for an Integrated Water Use License and other required approvals.
CoAL said the properties being acquired "significantly extend the scale and scope of its existing Voorburg and Jutland coal projects" and is an addition to its new projects that include Generaal, Wilderbeesthoek, Chapudi and Chapudi West projects.
CoAL CEO John Wallington said the acquisition of the Chapudi and related exploration properties "bolsters our existing coking coal projects." He said the Chapudi coal project alone doubles the Makhado project's 947 million mt resource and as such cements CoAL's position "as the dominant landholder in one of South Africa's most prospective coal basins."
"The acquisition also comes at a critical time with the results from the Makhado project definitive feasibility study due in early 2011 and we believe that the acquisition will strengthen our application for new order mining rights for the Makhado Project," Wallington said.
CoAL said all of the farms comprising the exploration properties related to Chapudi are contiguous to one or more of CoAL's existing Voorburg, Jutland, Mt Stuart and Makhado coal projects.
This means a significant expansion in both the scale and scope of each of these projects, the company said.
The Chapudi purchase from joint venture companies held by Rio Tinto Minerals Development and Kwezi Mining, provides CoAL with an additional estimated 1.04 billion mt JORC resource, of which 90 million mt is measured, 220 million mt indicated and 730 million mt inferred, CoAL said. The deal is the culmination of an asset swap agreement ongoing since 2008.
CoAL said gaining resources at Chapudi, in Limpopo province, would complement its flagship Makhado coking coal project.
CoAL said it will retain properties that were to be exchanged with Rio Tinto and Kwezi in accordance with the Rio farm swap agreement, which allowed it to apply for a New Order Mining Right for the Makhado project. The NOMR is the key legal right to develop the project under the mining law, without it nothing can be developed. The company anticipates that Makhado's NOMR application will be lodged before the end of 2010, followed closely by an application for an Integrated Water Use License and other required approvals.
CoAL said the properties being acquired "significantly extend the scale and scope of its existing Voorburg and Jutland coal projects" and is an addition to its new projects that include Generaal, Wilderbeesthoek, Chapudi and Chapudi West projects.
CoAL CEO John Wallington said the acquisition of the Chapudi and related exploration properties "bolsters our existing coking coal projects." He said the Chapudi coal project alone doubles the Makhado project's 947 million mt resource and as such cements CoAL's position "as the dominant landholder in one of South Africa's most prospective coal basins."
"The acquisition also comes at a critical time with the results from the Makhado project definitive feasibility study due in early 2011 and we believe that the acquisition will strengthen our application for new order mining rights for the Makhado Project," Wallington said.
CoAL said all of the farms comprising the exploration properties related to Chapudi are contiguous to one or more of CoAL's existing Voorburg, Jutland, Mt Stuart and Makhado coal projects.
This means a significant expansion in both the scale and scope of each of these projects, the company said.
