JOHANNESBURG (miningweekly.com) – AltX-listed Mine Restoration Investments (MRI) on Friday said it planned to commission its coal briquetting project in the next two weeks after securing financing for the project.
The company said that Octavovox, in which it held 51% through its Western Utilities Corporation (WUC) subsidiary, had secured R11-million to complete the project, located at Keaton Energy’s Vaalkrantz Colliery, near Vryheid, and prepare it for production.
MRI stated that first briquette production was planned for August, while continuous on-specification briquette production was targeted for September. The company recently pushed delayed the production date to September, from June.
The plant would produce about 5 000 t/m of briquettes by processing coal fines – traditionally an unwanted by-product in the coal mining industry – from the mine’s existing fines stockpiles and the monthly fines production.
MRI indicated that historical figures indicated that about 10% of the run-of-mine (ROM) coal production at Vaalkrantz was made up from fines in the washing plant thickener underflow.
Surface and underground coal mining operations in South Africa have a combined yearly output of about 300-million tons, creating significant coal residues such as dust and fines, which can typically constitute up to 20% of the total ROM feed.
In terms of the loan facility requirements and in accordance with section 45(2) of the Companies Act, MRI’s board adopted a resolution approving financial assistance to Octavovox, which is building the briquetting plant, in the form of a written option agreement with AfrAsia Special Opportunities Fund in terms of which MRI granted the right to AfrAsia to subscribe for shares in the share capital, which will be subject to MRI shareholders approval.
The resolution also incorporated a written guarantee in favour of AfriAsia in terms of which MRI guaranteed the due and timeous fulfilment of the obligations of Octavovox under the loan facility. Further, MRI reached a written reversionary cession agreement with AfriAsia that constituted that MRI cede in security to AfriAsia all its shares and claims in and against WUC, all its bank accounts and all its debtors as security for the obligations of the company under the guarantee.
A written agreement between MRI, AfriAsia and WUC was also reached, which stated MRI would subordinate all its claims against WUC in favour of AfriAsia’s claims under the loan facility agreement.
The financial assistance exceeded one-tenth of 1% of the company’s net worth as at its approval date.