Under the agreement ArcelorMittal will subscribe for up to 60 million new ordinary shares, approximately 16% of Coal of Africa's issued capital, at a price of $2.33 per share.
Coal of Africa will in turn provide ArcelorMittal with a minimum of 2.5 million tonnes per annum of coking coal from its Baobob (100%) and Thuli (74%) projects in the Limpopo Province of South Africa.
The shares in Coal of Africa will be issued in two tranches. The first tranche will comprise enough shares to bring ArcelorMittal's holding in the company up to 14.9%.
Following the completion of the first tranche, ArcelorMittal will have the right to nominate one person to be appointed director to Coal of Africa.
The second tranche will include the balance of shares, as long as this amount is not sufficient to give ArcelorMittal a holding of over 20% in the company. This will be issued upon approval by the Australian Foreign Review Board.
