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JOHANNESBURG (miningweekly.com) – Dual-listed Firestone Energy has rejected a R300-million offer from the Tata Power Company to buy 30% of its Waterberg joint venture (JV) coal project in South Africa.

The Indian group based the offer, which was announced last month, on the coal project being valued at R1.05-billion.

But Firestone deputy chairperson David Perkins said in a statement on Tuesday that the Tata offer “materially” undervalued the value built up in the Limpopo-based project to date.

Following the announcement, shares in Firestone climbed on both the ASX and JSE. The company traded 11% up in Australia and 9% higher in South Africa.

Last week, the Firestone and Sekoko Resources JV signed a memorandum of understanding with South Africa’s power utility Eskom for a 30-year, ten-million-ton-a-year thermal coal supply agreement.

The JV project would supply coal to two Mpumalanga power stations from 2014, when it starts production.

In the first phase of the Waterberg project, the JV will develop the Smitspan mine, which has a 1.9-billion-ton coal resource, as well as the Vetleegte mine, which is a metallurgical coal deposit.