31st Jan 2014 10:11
LONDON (Alliance News) - Coal of Africa Ltd Friday said sales dropped in the fourth quarter ended December 31, 2013, as it focused on restructuring its business.
The South Africa-focused coal miner said sales of export-quality coal decreased in the final quarter of 2013 to 7,677 tonnes, from 56,799 tonnes in the previous quarter as the company scaled down its operations as part of its new strategy.
Coal of Africa said the disposal process of its 74%-owned Mooiplaats Colliery, which was placed on care and maintenance in the third quarter 2013, continued during the last three months of the year and formal offers from prospective buyers are expected by the end of March, with agreements following.
The company said it expects to complete the Mooiplaats transaction during the second half of 2014.
Coal of Africa also said that during the quarter it made good progress towards the disposal of its 100%-owned Woestalleen complex and only certain ministerial consents remain. The company said it expects to receive approvals of the transaction in the near-term and ZAR100.8 million for the sites.
The company said its board approved a ZAR220 million plant modification programme at its 100%-owned Vele Colliery during the quarter and has suspended operations in anticipation of the commencement of construction.
As such, the Vele colliery produced 7,068 tonnes of run-of-mine coal during the quarter, compared from 127,764 tonnes the previous year as the company awaits its modifications to be completed, which is expected in the first half 2015.
Coal of Africa said that, following the quarter's end, a letter of intent is being negotiated with ArcelorMittal South Africa, following a positive coking coal test carried out by AMSA during the third quarter 2013, for the purchase of semi-soft coking coal to be produced by the Vele Colliery after the completion of its plant modifications.
The company also noted that during the quarter, it secured a ZAR210 million 18-month working capital facility from Investec Bank Ltd and has drawn down the first ZAR107.5 million. The company said it had USD4.2 million cash at the end of December.
Coal of Africa shares were up 5.2% to 6.05 pence Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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