Coal of Africa

South Africa’s Department of Mineral Resources has given Coal of Africa the go-ahead on two key projects.

Coal of Africa (CoAl), based in Western Australia and quoted on AIM, says the Pretoria authorities have granted it unconditional ‘New Order Mining Licences’ for its Vele coking coal project in Limpopo Province and its Holfontein coal project near the middle of South African resources, energy and chemical group Sasol’s Secunda coal production area. CoAl, which has 80% of Vele and an agreement to acquire the remaining 20%, now hopes to take the project to 1m tonnes of production this year, with an eventual annual target of 5m tonnes and an off-take agreement with steel giant Arcelor Mittal, a 23% shareholder, for the first 2.5m tonnes of annual production.

Simon Farrell, CoAl’s abrasive Australian managing director, trumpets ‘this is one of the biggest milestones in the company’s history and allows us to proceed towards development of Vele immediately on execution of the mining licence’. The company expects that to happen by the end of this month.

Shares in CoAl, which is already producing thermal coal from its Mooiplats project in Mpumalanga Province, reached 223p in 2008, after Growth Company Investor suggested partial profit taking at 217p and they fell back heavily. Highlighted again last June at 93p, they have now reached 129p and, though not without risk, stand to make further progress.