In 2010, CoAL’s subsidiary MbeuYashu Proprietary acquired stakes in Chapudi Coal (Proprietary) and Kwezi Mining and Exploration (Proprietary) (KME) from Rio Tinto Minerals Development and Kwezi Mining Proprietary.
Chapudi Coal and KME own the prospecting rights for the Chapudi coal project and associated exploration properties in Soutpansberg coalfield in the Limpopo province.
The full acquisition cost was $75m, of which $30m was subject to a deferred consideration agreement.
CoAL has to date settled a further $8m of the deferred consideration and the new deal outlines the agreed repayment terms for the rest of $22m.
Various mandatory payments have also been included in the deal and are linked to the completion of the third stage of the company’s equity raise and the completion of the divestment of Mooiplaats colliery and the disposal of other non-core assets.
CoAL chief executive officer David Brown said: "This was the last of the historic liability issues and this agreement provides certainty of outcome as well as providing CoAL with flexibility."
