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CoAL restarts Vele ops in SA after floods

Feb 01 2013 10:01
Reuters
Johannesburg - Junior coal mining company Coal of Africa (CoAL) has restarted limited operations at its Vele colliery in South Africa following heavy rainfall and flooding around the mine.

Operations at the mine, in the northern Limpopo province, were suspended earlier this month.

"Limited operations have re-commenced at the colliery and production is targeted for the first week of February," the company said on Friday.

CoAL said production in the three months to the end of December fell to 1.15 million tonnes from 1.52 million the previous quarter due to a scheduled shutdown over the festive season and a wage strike at its Mooiplaats colliery. 

Export sales through the Matola terminal in Mozambique rose 83% to 411 292 tonnes due to higher demand, availability of rail capacity and the reduction of inventory build-up in the previous quarter.

Domestic coal sales fell 17.8% due to the Mooiplaats labour unrest, while sales of middlings coal to power utility Eskom rose 26%.

The company also said that it had received the necessary approval for a unit of Beijing Haohua Energy Resource Co Ltd  to inject $100m  into the company, in a deal meant to help CoAL push on with development projects.

CoAL, which is also listed in London and Australia , has two operating collieries in South Africa, producing thermal and coking coal for the domestic and export markets, and other projects in development.  

The deal with Haohua Energy International (HEI) was executed in two stages, allowing HEI to subscribe for up to $100 million of ordinary shares in CoAL at 25 pence per share. 

HEI's parent is a Beijing-based coal producer and the largest exporter of anthracite coal from China.

CoAL's Johannesburg-listed shares are up nearly 48% so far this year, outperforming a 3% rise in the JSE's All Share [JSE:J203] index.

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