Coal of Africa Ltd (CoAL) has reached an agreement with Rio Tinto Minerals Development Ltd and Kwezi Mining Proprietry Ltd over deferred payments owed to Rio Tinto and Kwezi by CoAL in relation to the purchase of the Chapudi coal assets.
CoAL bought the Chapudi assets for an initial payment of US$35 million and another US$30 million is deferred payments in 2010. Since then, the company has made an additional US$8 million in payments to Rio Tinto and Kwezi, leaving US$22 million outstanding.
Under the new agreement, CoAL will make minimum monthly payments of US$100 000 with full and final settlement of the outstanding purchase price by 15 June 2017.
“This was the last of the historic liability issues,” said David Brown, CEO of CoAL. “This agreement provides certainty of outcome, as well as providing CoAL with flexibility. I would like to thank all parties for their co-operation.”
The Chapudi coal assets include prospecting rights for the Chapudi coal project and related exploration properties in the Soutpansberg coalfield in Limpopo province, South Africa.