JSE-listed Wescoal on Friday announced it was exiting the Khanyisa Triangle joint venture (JV) with Uju Resources, Mwelase Mining and Aztolinx, allowing Wescoal to exploit the coal resource exclusively.
In 2016, Wescoal and Uju agreed to jointly exploit the mining area known as the Khanyisa Triangle.
Aztolinx was then incorporated as the special purpose vehicle through which the JV operations were conducted.
Wescoal held 35% and Uju 65% in Aztolinx.
However, during 2018, a dispute arose between the parties, impacting on production and sales. The dispute resulted in litigation.
To resolve the dispute, the parties terminated their JV agreement, while Wescoal retains the title to the Khanyisa mining right and will exploit the coal resource at Khanyisa Triangle exclusively, for its remaining four-year life.
Aztolinx relinquished its rights related to the Khanyisa Triangle, including its right to buy, on cost-based pricing, all of the coal extracted from the resource.
Aztolinx is also buying back Wescoal’s 35% shareholding for R100, while Wescoal will pay R185-million over a nine-month period to Aztolinx for its Khanyisa Triangle interest.