The acquisition last year of Chapudi, which also included other coal exploration properties in the region, means the company now has a 1.04 billion tonne JORC compliant resource and both thermal and coking coal development projects, he said.

“[The acquisition] is expected to cement Coal as the largest holder of prospecting rights in the highly prospective Soutpansberg basin with significant exploration potential,” he said.

Coal of Africa paid a $US2 million cash deposit in November 2010 with a $US43 million upfront cash consideration payable on regulatory approval by April 2012.

A $US30 million deferred cash consideration is payable on the earliest of the granting of a new order mining right for any farm or 24 months from fulfilment of all condition precedents for the sale.

Wallington said Coal of Africa’s assets were strategically located with access to key potential domestic clients and main coal export corridors with current capacity of 3 million tonnes per annum through rail and port infrastructure.

There is future expansion potential in port capacity by a further 10-20Mtpa to accommodate planned production growth, he said.