Johannesburg - Coal of Africa rose the most in more than three weeks after the Australian mining company announced the sale of its Mooiplaats colliery in South Africa’s Mpumalanga province.
The Perth-based company, known as CoAL, signed a sale and purchase agreement for the thermal-coal mine with Blackspear Holdings for 250 million rand, it said in a statement today.
The stock climbed as much as 18 percent, the biggest intraday gain since August 26, to 0.66 rand and traded 14 percent higher at 0.64 rand at 12:45 p.m. in Johannesburg.
“The sale of Mooiplaats was one of two remaining priorities under the company’s five-point turnaround strategy,” the producer said in the statement.
CoAL cut cash consumption and sold four other assets as part of its development plans.
The company is building the Makhado colliery in the northern Limpopo province that may produce 5.5 million metric tons of the fuel annually, and expects to get regulatory approvals and black-shareholder funding for the project in the fourth quarter.
CoAL idled Mooiplaats last year after a downturn in global thermal-coal prices hampered efforts to make the operation profitable.
Blackspear is required to provide CoAL with evidence of funding on or before October 31 and start monthly payments from November, the producer said. - Bloomberg News