Coal of Africa Limited (CoAL) can pat itself on the back after posting a leap in sales for the six months to December last year, following the acquisition of a mine in January last year.
Gross profit for the group was $18 million (R126m) in the period, compared with $1m a year earlier.
Stephen Meintjes of Imara SP said the company’s performance reflected only a “developmental situation” as the issues for the company’s major projects remained unresolved.
There are outstanding issues with the Vele and Makhado coking projects in Limpopo. The company expects these collieries to supply both the domestic and the export market.
CoAL is waiting for an answer from the government on whether it can reopen the Vele project near Mapungubwe, which was shut down last year after the Department of Environmental Affairs issued a compliance notice requiring an end to all activities on site.
The company said yesterday that it “is confident that it has addressed the concerns and designed sufficient mitigation into the mining layout and processes to ensure co-existence with eco-tourism and agriculture”.
CoAL has submitted an application for new order mining rights for the Makhado project after the department approved the exchange of new order prospecting rights between CoAL and Rio Tinto. It is completing a definitive feasibility study for the Makhado project.
In a statement on its results yesterday, CoAL said revenue from the sale of coal arising from the acquisition of NuCoal only accrued to the group with effect from January 2010. NuCoal is a junior thermal coal producer with assets near CoAL’s Mooiplaats mine.
It was acquired by CoAL for R467m and it produces 4.2 million tons a year.
Export sales climbed to 352 268 tons from 263 681 tons in the first half of 2010 and domestic sales rose to 141 697 tons from 51 909 tons.
In November last year CoAL agreed to buy coal assets in the Soutpansberg from the Rio Tinto group for $75m, which CoAL said yesterday would be paid in full once a mining licence for one or more of the projects was granted. These assets include the Chapudi project, which is contiguous with the Makhado project.
Shares in CoAL gained 10c to R8.75 on the JSE yesterday. - Business Report
