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Coal of Africa shares rise as miner gets green light for Makhado project

Cape Town – Coal of Africa (CoAL) [JSE:CZA] received the green light to start its Makhado Project after Water and Sanitation Minister Nomvula Mokonyane lifted its suspended water use licence. 

In April 2016, CoAL’s initial 20-year licence was suspended after the Vhembe Mineral Resources Forum, consisting of concerned citizens and residents of Limpopo province, launched an appeal to the Department of Water and Sanitation. 

READ: Coal of Africa suffers water blow 

CoAL subsidiary Baobab Mining and Exploration intended to start building the Makhado coking and thermal coal project, which will produce about 5.5 million tonnes of coal a year for domestic and export markets, in the second half of 2016.

CoAL CEO David Brown on Monday said in a statement that the company made representations to Mokonyane in May 2016 and February 2017, respectively. 

“The minister exercised her discretion and lifted the suspension in terms of the National Water Act. The appellants have the opportunity to voice their concerns through the Water Tribunal,” according to the statement. 

READ: Insider trading rocks SA coal mine 

Brown said the lifting of the appeal by the minister and the recently announced finance facility by the Industrial Development Corporation (IDC) are “key steps” in the advancing of the Makhado project.  
 
“[The minister’s] decision completes the suite of regulatory authorisations required for the Makhado project.  It further confirms government’s support for the Makhado project and its potential to drive sustainable socio-economic transformation.

"We will continue to work with all parties to ensure that the matter is completed satisfactorily, and furthermore to secure the remaining surface rights,” Brown said. 

CoAL announced earlier this year that it reached a loan agreement with the IDC of up to R240m for Baobab Mining and Exploration for the Makhado project.

CoAL's share price increased by over 4% following the announcement.

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