Continental Coal starts implementing black empowerment deal in South Africa
9:11 am by Sergei Balashov - Proactive Investors UK
Continental Coal's partner SIOC-cdt has started making the initial payment of ZAR140 million (£11.4 million) under the partnership deal between the two companies.
Continental Coal (LON:COOL, ASX:CCC) told investors that its new South African partner has now started making the initial payment of ZAR140 million (£11.4 million) under the partnership deal between the two companies.
Under the terms of an agreement signed in November last year, Continental’s black empowerment partner Sishen Iron Ore Company Community Development Trust (SIOC-cdt) has taken a 26 per cent stake in its subsidiary Continental Coal Limited, which was previously held by Masawu.
In addition to the initial payment of ZAR140 million, SIOC-cdt will invest a further ZAR75 million (£6.1 million) to fully satisfy the ZAR215 million loan advances made by Continental Coal on behalf of its previous partner.
The funds will be used for the development of Continental’s thermal coal mining business in South Africa.
“The partnership with SIOC-cdt is considered to be a landmark agreement and we believe it will have a major impact on our business activities and opportunities in South Africa,” said chief executive of Continental Coal Don Turvey.
“In addition to the agreement and partnership itself, it will now provide CCL with further capital of ZAR140 million from the repayment that will now be applied to advance our South African coal projects.”
Continental Coal has been accelerating development of its Penumbra coal mine. The company is targeting first coal at Penumbra in the second half of 2012, and has up to 500,000 tonnes of coal sold under existing offtake agreements.
