JOHANNESBURG - MC Mining said on Thursday Department of Mineral Resources (DMR) had approved its application for the sale of the Mooiplats Colliery situated in Ermelo coal fields in Mpumalanga province and that it had received the first quarterly payment of R11.3 million.
MC Mining, formerly Coal of Africa, sold its shares and claims in the Mooiplaats thermal colliery for an aggregate purchase price of R179.9m to MCH - a consortium of investors - in October 2017.
The conditions for the transaction were satisfied in November 2017 resulting in the company receiving the initial sale proceeds of R67m. The timing of the 10 equal quarterly payments to settle the remaining balance of R112.9m was scheduled to commence during August 2018 but was dependent on DMR approval to incorporate certain prospecting rights into the colliery’s mining right.
Section 102 of the Mineral and Petroleum Resources Development Act requires ministerial consent for the amendment or variation of an approved social labour plan or an environmental authorisation.
David Brown, chief executive of MC Mining, said the disposal of Mooiplats would result in millions of rand in cost savings.
"The Section 102 approval was the final requirement to complete the Mooiplaats sales process that commenced during 2013 and is another significant step in the clean-up of the company’s balance sheet," Brown said.
"The Mooiplaats disposal will result in estimated annual cost savings of R18m and the quarterly payments will be used to develop MC Mining’s flagship Makhado hard coking coal project."