Coal of Africa (CZA) – Rail allocation secured for coking coal projects

Highlights
• Rail allocation secured with Transnet Freight Rail for 1 million tonnes per annum  to the Matola dry bulk terminal.
• Agreement reached to provide loan funding to expand the Matola Terminal, securing additional 2 mtpa port allocation by anticipated completion of 1 August 2010.

Further to its announcement on 25 August 2008, Coal of Africa Limited is pleased to announce that agreement has been reached with Transnet Freight Rail, a division of Transnet, the South African Government owned rail and freight organization, for the rail allocation of 1 mtpa of coal to the Matola Terminal in Maputo, Mozambique. 

This allocation matches the Company’s current port allocation of 1 mtpa for the export of coking coal from the Vele and Makhado Coking Coal Projects (“Coking Coal Projects”) through the Matola Terminal, secured via a throughput agreement with Terminal De Carvao Da Matola Limitada.

Simon Farrell, Managing Director of CoAL, commented: “The initial rail allocation secured on the Maputo corridor, together with the increased capacity at Matola, represents further significant milestone for the Company and overcomes a huge logistical challenge. Furthermore, it potentially adds substantial value to the Coking Coal Projects of Vele and Makhado now that the Company has a clear and tested path to the export markets.”

Mr Farrell also noted: “In addition to the current expansion plans at Matola, a feasibility study for a further 10mtpa increase in capacity is underway. Given that the Company also has the rights to this additional capacity, CoAL may secure a total of 13mtpa export capacity via the Matola Terminal in addition to the potential 5mtpa domestic off-take agreement with ArcelorMittal. This would provide CoAL with the opportunity to deliver significant volumes of coking coal to global and domestic markets.