The negotiations for the sale of Coal of Africa Limited’s (CoAL’s) idled Mooiplaats thermal coal colliery, within the Ermelo coalfield, continue into advanced stages during the quarter to March as key milestones in the repositioning of the JSE- and ASX-listed coal company are completed.

CoAL expected the sale of its last five noncore assets up for disposal to be completed during the second half of the year.

“The company is committed to assisting interested parties in the process of completing feasibility studies and the application for funding … to table a successful sale,” CEO David Brown said.

This came as CoAL moved to complete the five-point turnaround strategy implemented a year ago, which included offloading the Woestalleen colliery, near Ermelo, the Mpumalanga-based Opgoedenhoop mining right, coal explorer Lemur Resources and the Holfontein project, in the Witbank coalfield.

During the three months to March, CoAL secured the regulatory approvals required for the disposal of the noncore Woestalleen complex and the Opgoedenhoop assets.

Woestalleen received Section 11 approval from the Department of Mineral Resources (DMR) for the sale of all the equity and loan accounts in NuCoal Mining, which resulted in the sale consideration of R80-million paid to CoAL.

The DMR also approved the sale of the undeveloped Opgoedenhoop mining right, resulting in a deposit of R5-million becoming payable, with the balance of R15.8-million payable within 12 months.

“These disposals are significant milestones in the company's strategic turnaround strategy and a portion of the proceeds from the sale will be used to reduce the Investec working capital facility exposure,” Brown commented.

During the period under review, CoAL also submitted to the DMR the outstanding documents required for the processing of the new order mining right and integrated water-use licence applications for the Makhado coking coal project, in Soutpansberg, as well as the environmental management programmes for the environmental-impact assessment phase for the Generaal, Chapudi and Mopane projects, under the Limpopo-based Greater Soutpansberg project, or MbeuYashu.

Meanwhile, the company expected to complete the front-end engineering design (Feed) for its Vele coking and thermal coal colliery’s plant modification by June after the appointment of Sedgman as engineer.

The three-month Feed process, which was a critical step to ensure the Limpopo-based colliery's ability to process 2.7-million tonnes a year of run-of-mine (RoM) coal, kicked off in March and included improvements to the existing plant; the addition of RoM handling, crushing and screening sections; coal screening plants; a classifier and a froth flotation plant for the beneficiation of the fines and ultrafines; and product and discard stockpiling and load-out facilities.

“The plant modification will result in the simultaneous production of semisoft coking coal, sized thermal coal for the domestic market and [State-owned power utility] Eskom-quality thermal coal and is expected to be completed during the first half of 2015 followed by a production ramp-up phase,” Brown noted.

By June, CoAL expected to receive the relevant responses to its necessary applications to align the Vele plant modification process with the requirements of Section 24G of the National Environmental Management Act.

Meanwhile, CoAL continued negotiations with diversified mining major Rio Tinto on the payment terms of a $30-million settlement liability, due this year, to match the available cash resources of CoAL.

The group was also in the process of finalising a settlement with JSE-listed Grindrod with regard to the take-or-pay liability for the remaining term of a contract ending in 2016.