Quarterly Report ended 31 March 2015

ANNOUNCEMENT 23 April 2015

REPORT FOR THE QUARTER ENDED 31 MARCH 2015

Makhado Empowerment Structure Finalised

Coal of Africa Limited ("CoAL" or "the Company") which operates in South Africa, together with its subsidiaries, hereby provides its update for the quarter ended 31 March 2015. All figures are denominated in United States dollars unless otherwise stated. A copy of this report is available on the Company's website, www.coalofafrica.com.

Salient Operational Features

· No lost-time injuries recorded during the quarter (FY2015 Q2: nil).

· Approval granted for the amended and updated Environmental Authorisation ("EA") for the Vele Colliery to include the anticipated plant modifications while the application for the amendment and extension of the IWUL for the colliery is still pending following which the Company will make a decision on the timing of the start of the plant modifications.

Corporate and Financial Features

· Submission to the Department of Mineral Resources ("DMR") after the conclusion of agreements with broad based black economic empowerment ("BBBEE") partners to acquire up to 26 per cent of the Makhado Project.

· The Makhado BBBEE partners have two years to raise sufficient capital to acquire their interests in the project with the final amount payable subject to due diligence and will be negotiated with the Company. The transaction ensures that the Makhado Project complies with mining legislation in South Africa and is an important step in the process for the granting of a New Order Mining Right ("NOMR").

· The liability owing to Rio Tinto was reduced during the quarter on the payment of $1.0 million (FY2015 Q2: $6.3 million) while discussions continued on the settlement of the remaining capital balance of $22.5 million.

· Continued discussions with stakeholders including the communities and the Department of Mineral Resources in advancing the award of the Makhado Project NOMR.

· The Company continued to engage with the Department of Water Affairs to progress the application for the Makhado Project Integrated Water Use Licence ("IWUL"), which CoAL anticipates should be issued after the receipt of the NOMR.

· Receipt of R1.5 million ($0.13 million) for the sale of the Opgoedenhoop NOMR with the balance of R17.6 million ($1.5 million) (including VAT) due by the end of H1 CY2015.

· Resignation of Michael Meeser as Chief Financial Officer and Executive Director during the quarter.

· Available cash at period end was $13.5 million and restricted cash of $2.1 million.

Post Period Event

· An appeal against the Vele Colliery amended and updated EA was lodged with the Department of Environmental Affairs ("DEA") during April 2015.

Commenting today, Mr David Brown, Chief Executive Officer said: "The Makhado Project empowerment structure was formalised during the quarter and completes one of the last requirements for the granting of a mining right for the project. The structure results in communities residing in the vicinity of the project acquiring 20 per cent of the project with a further 6 per cent acquired by Historically Disadvantaged South Africans. The Company expects that the Makhado Project mining right will be granted during H1 CY2015, a critical step to unlock the significant value of CoAL's flagship hard coking and thermal coal asset."

QUARTERLY COMMENTARY

Mooiplaats Colliery - Ermelo Coalfield (74% owned)

The Mooiplaats thermal coal colliery ("Mooiplaats Colliery") was placed on care and maintenance during the September 2013 quarter and recorded no lost time injuries ("LTIs") during the period (FY2015 Q2: no LTIs).

During Q1 FY2015 the Company signed an SPA with Blackspear Capital Proprietary Limited ("Blackspear") for the disposal of the Mooiplaats Colliery for R250 million ($20.7 million). Blackspear has until 30 April 2015, on a non-exclusive basis, to agree terms with a financial and operational partner to fund its acquisition of Mooiplaats. During the quarter the Company commenced discussions with other potential purchasers.

Vele Colliery - Limpopo (Tuli) Coalfield (100% owned)

The Vele coking and thermal coal colliery ("Vele Colliery") recorded no LTIs during the quarter (FY2015 Q2: no LTIs).

The Company's applications to amend the colliery's EA to include the plant modifications were approved by the DEA during the quarter. The Company previously submitted applications to amend and renew Vele's IWUL and is confident these will be received during H1 CY2015. The current Vele Colliery IWUL is valid until March 2016 and the Company has delayed the commencement of the plant modification construction to Q3 CY2015 pending these approvals, which also gives the Company further time to assess the outlook for coal prices.

Makhado Coking Coal Project - Soutpansberg Coalfield (100% owned - 74% post BBBEE transaction)

The Makhado coking coal project ("Makhado Project") recorded no LTIs (FY2015 Q2: no LTIs) during the quarter.

South African mining legislation requires that mining and exploration projects have a minimum 26% black economic empowerment shareholding and CoAL previously signed a Memorandum of Agreement to enable seven local communities (the "Communities") to acquire a 20% interest in the Makhado Project. During the quarter the Company signed acquisition agreements with the Makhado Colliery Community Development Trust (the "Trust"), an umbrella trust that will ensure communities are beneficiaries, and Yoright Investments (Pty) Ltd ("Yoright") formed by black entrepreneur Mike Nkuna whose shareholders will include other Historically Disadvantaged South Africans. In terms of the acquisition agreements the Trust and Yoright have two years to raise sufficient funding to acquire their respective twenty per cent and six per cent interests in the project, with the final amount payable subject to due diligence and will be negotiated with the Company.

An interim court interdict was issued against the Makhado Project during Q2 FY2015 seeking to halt any mining or construction activity on the site. During the quarter the Company, as one of the respondents, continued preparation to have the interim interdict to set aside and does not anticipate that this process the affect the timetable for the mine to commence commercial production during CY2019.

Greater Soutpansberg Project (MbeuYashu) (74% owned)

The MbeuYashu Project recorded no LTIs (FY2015 Q2: no LTIs) during the period.

Corporate Update

During H2 CY2014 CoAL received $46 million on completion of the first two stages of the shareholder approved $60 million equity placement process. The attached Appendix 5B excludes potential proceeds from stage 3 of the equity placement process which is still anticipated by the end of April 2015.

Authorised by

David Brown

Chief Executive Officer

23 April 2015

For more information contact:

Company advisors:

Investec Bank Limited is the nominated JSE Sponsor

About CoAL:

CoAL is an AIM/ASX/JSE listed coal exploration and development company operating in South Africa. CoAL's key projects include the Vele Colliery (coking and thermal coal), Makhado Project (coking and thermal coal) and the Greater Soutpansberg Project /MbeuYashu.

Tenements held by CoAL and its Controlled Entities

* Form part of the Greater Soutpansberg Project

- Lapsed - Mining Right Application Lodged

-- Valid - Mining Right Application Lodged

~ Tenement located in the Republic of South Africa

^ Tenement located in Western Australia