Ichor Coal said that it is buying Penumbra mines for ZAR55m ($4.44m).
Ichor Coal said that the mine has resource of 14 million tonnes in situ, and it has produced 500,000 tons of coal per annum since 2012.
The company will pay ZAR 73m ($5.9m) for 50% stake in Ntshovelo that owns Vlakvarkfontein.
Vlakvarkfontein is capable of producing 1.2 million tonnes of thermal coal a year, the company said.
IchorCoal CEO Nonkululeko Nyembezi-¬Heita said: "Particularly noteworthy is the proximity of Penumbra to our current operation at Vunene and the potential to extract material synergies, which will result in numerous benefits including the lowering of the overall operating cost.
"Further, our existing, indirect, shareholding in Vlakvarkfontein makes us the logical acquirer of this asset and clearly demonstrates IchorCoal’s strategy to actively participate in the consolidation of the South African junior coal sector."
IchorCoal said that the financial backing for the acquisition would come through internal funds and third party funding.
