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Coal of Africa close to concluding Chapudi deal

01 May 2012
JOHANNESBURG ( – ASX- and JSE-listed Coal of Africa Limited (CoAL) said on Monday that the deadline for the completion of the Chapudi acquisition was extended to the end of May.

The extension enabled certain conditions, such as the Section 11 approval from the Department of Mineral Resources, to be fulfilled.

The coal exploration and development company was currently in the process of buying the $75-million Chapudi coal project and its related coal assets, in the Soutpansberg coalfield, in Limpopo, from joint venture partners Rio Tinto Minerals Development and Kwezi Mining.

CoAL said in a statement that it continued to make progress on the fulfillment of the conditions of the sale and purchase agreement for the acquisition and remained confident of obtaining the approvals soon.

Owing to the close proximity of the Chapudi assets to CoAL’s Makhado coal project, a further detailed review to evaluate the options available in the company’s initial mine plan was undertaken and was expected to be complete by mid-2012.

A comprehensive report, which would include Makhado’s definitive feasibility study and an updated reserve and resource statement for the region (including the Chapudi assets), would be issued on the Makhado project.

Meanwhile, CoAL reported that its Vuna colliery, in Mpumalanga, produced 852 692 t of run-of-mine (ROM) coal during the March quarter, compared with 821 392 t produced in the December 2011 quarter.

The company’s Mooiplaats operations, also in Mpumalanga, increased its ROM production from 262 004 t in the previous quarter, to 317 531 t in the three months ended March 2012.

CoAL attributed this to, besides others, a number of operational interventions, improved maintenance scheduling and increased equipment availability.

“The company achieved significant milestones during the March quarter with progress on a number of fronts. These include the completion of the commissioning of the plant at Vele colliery, a preliminary review of the Makhado project definitive feasibility study by the CoAL board and near completion of the Rio-Tinto/Kwezi transaction over the Chapudi assets,” said CoAL CEO John Wallington.

Meanwhile, CoAL continued to develop its coal-bed methane gas project, in the Soutpansberg coalfield.

The group identified a trial site to initiate exploration and commissioned further technical work on permeability and porosity. A Joint Ore Reserves Committee-compliant resource exploration programme plan was being developed and the programme was expected to start in the second half of the year.

The project was registered with the United Nations’ internationally accredited carbon credit programme, while a project information note, which provided further details on the project, was registered with the Department of Energy.

Wallington concluded that the company remained focused on improving operational performance at its two thermal mines Mooiplaats and Vuna, while ramping up Vele to full production and continuing with its development activities on the Makhado, Greater Soutpansberg and coal-bed methane projects.