Coal of Africa calls Makhado the most advanced exploration project in Limpopo province’s Greater Soutpansberg coalfield.
The agreement to continue negotiations until September 30 follows an initial review of the draft definitive feasibility study for Makhado.
During this period, Exxaro will consider further analysis of the proposed coal mine before making a formal decision regarding its right to a 30% equity participation in Makhado.
Coal of Africa chief executive John Wallington said he was pleased with the progress of discussions with Exxaro.
“The decision for Exxaro to continue with this process is encouraging and will enable both parties jointly to complete the remaining work required to finalize the review of the definitive feasibility study and valuation of the Makhado project,” he said.
“Against the background of the detailed testing results that confirmed the ability to produce a hard coking coal product and the recently announced consolidation of the new order prospecting rights over the adjacent tenements acquired in the Soutpansberg coalfield, this bodes well for the future development of the Makhado project.”
Exxaro chief executive Sipho Nkosi said the development of high quality metallurgical coal assets was fully in line with Exxaro’s strategic growth objectives.
“During the past number of months we have established an excellent working relationship with Coal of Africa and look forward to the joint effort to finalize the review of the Makhado project and the negotiations for Exxaro’s possible participation in the project,” he said.
The project covers 8190 hectares of Southpansberg’s Makhdo region which holds 1.3 billion tonnes of coal.
Based on the reserve and resource update announcement published June 13, the JORC-compliant resource for the Makhado is 795.6 million tonnes of coal, 344.4Mt minable.
Coal of Africa is an emerging developer and producer of high-quality thermal and coking coal with projects in northern and eastern South Africa.
Exxaro is South Africa’s second largest coal producer with a capacity of 45Mt of coal per annum.
