According to Coal of Africa Ltd (CoAL) managing director Simon Farrell, ArcelorMittal South Africa (ArcelorMittal SA), the South African unit of the world's largest steelmaker and also the biggest steel producer in Africa, is likely to launch a full takeover offer for CoAL.
"ArcelorMittal South Africa is a likely bidder along with others," Mr. Farrell told reporters in London, citing the discussions between the two companies.
Mr. Farrell went on to add, "ArcelorMittal South Africa may bid after Coal of Africa obtains permits for its Vele Project. Coal of Africa may get the permit in the third quarter."
Meanwhile, ArcelorMittal has declined to comment on a potential bid.
In April, ArcelorMittal South Africa Ltd acquired a 16.3 percent stake in CoAL for ZAR 404.5 million (around $45 million) in cash to increase control over raw material supplies.
As part of the transaction, ArcelorMittal SA has an option to enter into an off-take agreement with CoAL for the supply of an annual 2.5 million mt of metallurgical coking coal.