South Africa-based coal producer Coal of Africa Limited (CoAL) has announced that South Africa's Exxaro Coal Proprietary Limited (Exxaro) has decided not to exercise its 30 percent buy-in option in CoAL's Makhado coking coal project in Limpopo, South Africa.
Exxaro stated that the company also considered the various alternative projects currently in its project portfolio and had to focus on its top priorities given the current negative sentiments regarding the global and local macroeconomic growth outlook.
Meanwhile, in a separate statement, Coal of Africa announced that it has entered into a binding agreement with China's Haohua Energy International (HEI), a wholly-owned subsidiary of Beijing Haohua Energy Resource (BHE).
Accordingly, HEI will subscribe for up to $100 million of ordinary shares in CoAL at 25 pence per share in two stages. The initial payment of $20 million is only subject to approval by Australia's Foreign Investment Review Board (FIRB), as HEI said that approval from the Chinese authorities is not required. However the remaining $80 million is subject to all the necessary regulatory and statutory approvals, including approval by the Chinese authorities and CoAL shareholders.