Baobab Mining and Exploration is a subsidiary of CoAL and owner of the mining right for the Makhado Project in Limpopo.
The Makhado Project is CoAL’s most advanced feasibility-stage project with 344.8 million mineable tons in situ. The resource will initially be mined on an opencast basis over 16 years with the potential for expansion underground.
CoAL said the national development finance institution, the IDC, which was set up to promote economic growth and industrial development, would advance to Baobab in two equal tranches of R120 million.
CoAL chief executive David Brown said while final agreements had now been executed, the transaction with the IDC was initially agreed in December 2016, and was reflective of the company’s position at that time.
Brown said this was a defining step towards bringing the project to reality. “The funding of pre-project activities at Makhado is welcomed as we progress the project towards a construction start subject to regulatory and funding requirements,” Brown said.
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“We continue to focus on the upliftment and dismissal of the appeal against the integrated water use licence and securing the remaining surface rights of the project.
“We welcome the IDC as a supportive shareholder in the Makhado project who will work with CoAL to promote future success.”
CoAL shares remained flat on the JSE at 50 cents.