columbia here we come..

By Robb M. Stewart

Of DOW JONES NEWSWIRES



PERTH (Dow Jones)--Continental Coal Ltd. (CCC.AU) plans to replicate the success it has

had developing producing thermal coal mines in South Africa with a push this year into

Columbia and coking coal, Executive Director Jason Brewer said.

Broadening the company's assets beyond South Africa is expected to lessen the

perceived risk for investors who are concerned by the debate that has dragged on in

recent years in the southern African country over the possible nationalization of mining

assets, which while not government policy has been trumpeted by the youth wing of the

ruling African National Congress, Brewer said in an interview in the Western Australia

city of Perth.

"Getting into coking coal and getting into production very quickly [in Columbia]

is on the cards for Continental Coal," he said, adding he expected a move in 2012.

The company has been approached by companies willing to back the move in exchange for

securing output of the steelmaking commodity, Brewer said. He declined to name the

companies Continental has been holding talks with, but did say that this time it

wouldn't partner with EDF SA, which helped underpin its development in South Africa

with an agreement to buy exported thermal coal.

Columbia has many of the same characteristics as South Africa with established

infrastructure, but coal operations are mainly small or family-owned and lack the

mechanization needed for higher volume production, Brewer said.

"South Africa is a great cash generating environment," he said, but added the

risk premium attached with operating there means that only a fraction of the money earned

from producing coal in the country is reflected in Continental's share price.

"We have cash flow...we are in a very fortunate position," Brewer added.

Continental will continue to develop its assets in South Africa, where it has two

operating mines producing about 2 million metric tons a year for the domestic and export

markets, a third mine in development and has completed a bankable feasibility study on a

fourth, Brewer said. Continental last month said it was set for run of mine production in

South Africa of 7 million tons a year in 2013, and 10 million tons by 2015.

Continental has an agreement to sell its export coal to a unit of EDF for 20 years at a

market benchmark price, and sells coal for the domestic market to state utility Eskom

Holdings Ltd. It struck a deal in late 2010 to bring in South Korea's state-owned

Korea Resources Corp. as a minority partner to help develop its Vlakplaats project in

exchange for coal that will be exported through Richards Bay Coal Terminal when

production begins.



-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; [email protected]