Coal of Africa (CoAL) and its subsidiary company, MbeuYashi Propritary Ltd, have been accused of breaching payment obligations relating to the 2010 acquisition of the Chapudi coal project from Rio Tinto Minerals Development and Kwezi Mining.
MbeuYashi originally acquired the Chapudi assets for US$75 million. Located in Limpopo Project, the assets comprise both thermal and metallurgical coal development projects and are contiguous with CoAL’s flagship Makhado metallurgical coal project, which now forms part of the company’s Greater Soutpansberg project.
Of the original US$75 million price tag, CoAL and MbeuYashi have repaid US$56 million, leaving US$19 million still to be repaid. According to CoAL, this is due by 15 June 2017 but Rio Tinto and Kwezi Mining now claim that payment is due immediately.
CoAL has disputed the claims and said it will “defend itself vigorously” should Rio Tinto and Kwezi pursue the matter. “CoAL and MbeuYashi have met and will continue to meet all of their payment obligations to Rio Tinto and Kwezi,” the company said in a statement.
CoAL is currently in the process of acquiring ASX-listed South African coal mining and development company, Universal Coal. When asked what impact the Rio Tinto notice would have on the acquisition, the company told World Coal: "At this stage the company does not envisage this having an impact on the Universal Coal acquisition. The company remains focused on completing the acquisition and as, per the press release today, it will be disputing the validity of the notice from Rio Tinto."
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/08032016/coal-accused-of-breaching-chapudi-payment-obligations-2016-352/