South Africa’s CoAL Presses on with Growth Plans
Coal of Africa (CoAL) has submitted environmental reports on its Vele coking coal project near Musina to the South African Department of Minerals and Energy, and is continuing to schedule the start of mine development in the third quarter. According to Business Day, however, environmental groups warned that securing environmental permits would be lengthy, and reiterated they were adamant in opposing the mine. In a presentation to investors, posted on its Web site, CoAL said it expected to secure a mining permit for Vele by the third quarter and start production by the fourth quarter. Vele will supply Arcelor-Mittal SA, replacing some of the coking coal that the steel maker is sourcing from outside South Africa. CoAL CEO Simon Farrell said that Arcelor-Mittal SA, which already holds a 16% stake in CoAL, could make a takeover offer for the company after the mining permit for Vele was obtained. Cash flow from Vele and CoAL's thermal coal project, Mooiplaats, which is now ramping up activities, would enable the group to bring a third mine at Makhado into production by late next year. According to the company presentation, "CoAL is committed to the fastest possible development of its assets, given its existing cash resources of A$122 million as of March 31, 2009."