The companies have entered into an agreement for the sale of the Chapudi coal project, which lies in the Limpopo Province near Coal of Africa’s Makhado coking coal project and has an estimated 1.04 billion tonne JORC resource.

The properties significantly extend the scale and scope of CoAL’s existing Voorburg and Jutland coal projects, and add new project areas including Generaal, Wilderbeesthoek, Chapudi and Chapudi West, CoAL chief executive John Wallington said.

“The acquisition of the Chapudi coal project and the related exploration properties bolsters our existing coking coal projects with the Chapudi coal project alone doubling our Makhado project’s 947 million tonne resource, thereby cementing CoAL’s position as the dominant landholder in one of South Africa’s most prospective coal basins,” he said.

“The acquisition also comes at a critical time with the results from the Makhado project definitive feasibility study due in early 2011 and we believe that the acquisition will strengthen our application for new order mining rights for the Makhado project.”

The resource is made up of 90Mt measured, 220Mt indicated and 730Mt inferred.

The Soutpansberg Basin is the only coal basin in South Africa that hosts significant premium hard coking coal.

CoAL’s working knowledge of this acreage, having owned, explored and delineated the resource at Makhado, will aid in further exploring the contiguous acreage the company has acquired, Wallington said.

“CoAL’s dominant presence in the region, together with its leading logistics capability coupled with the dual thermal and coking application of the coal assets being acquired are likely to present significant opportunities in the region as it develops, allowing CoAL to capitalise on a ‘first mover advantage’ through consolidating, joint venturing or otherwise restructuring its presence in the Soutpansberg Basin,” he said.

CoAL’s share price was A2c lower at $1.205 this morning.