Beacon Hill Resources Plc and Vitol Coal S.A. have entered into a Coal Marketing Agreement whereby Vitol will act as agent to market export coal produced by Beacon Hill’s Minas Moatize Mine.
Justin Lewis, Chairman of Beacon Hill commented, “This strategic marketing partnership with Vitol provides Beacon Hill with direct access to one of the largest coal marketing and trading networks globally, which is an important development for the Group. In addition to benefitting from Vitol’s global coal marketing expertise, we also have the advantage of an injection of funding which will assist the company with current and future funding requirements as we increase our presence in the globally significant coking coal region of Tete.”
Bob Finch, Head of Coal at Vitol added, “We are delighted to have entered into this partnership with Beacon Hill, which has allowed us to have a presence in the Moatize Basin of Mozambique, which we consider to be one of the world’s most significant undeveloped coking coal regions. Coal trading has become an increasingly important part of the Vitol Group’s trading portfolio and this partnership makes an important contribution to our growth.”
BHR Coal Mauritius Ltd (BHRC), a wholly owned subsidiary of Beacon Hill, has entered into a Coal Marketing Agreement with Vitol. Pursuant to the agreement, BHRC will appoint Vitol as its exclusive agent to manage the marketing and sale of the export coal produced from the Minas Moatize mine.
The initial term of the agreement is for four years, with Vitol having an option to extend the agreement for a further four years. Beacon Hill will continue to market and sell coal produced by the Minas Moatize directly to the African domestic (non-seaborne) market. Global Minerals & Metals Limited, a subsidiary of Global Coke Limited, will continue to be offered up to 600 000 tpy of coking coal for the life of the mine.
A change of control clause has been included in the agreement, which will provide either party with the right to terminate the agreement in the event of a change of control of Beacon Hill or the Minas Moatize Mine, subject to a termination payment being paid by BHRC.
In connection with the Coal Marketing Agreement, Vitol will advance to BHRC and BHR Mining Mauritius Ltd (a wholly owned subsidiary of Beacon Hill), a secured debt facility of up to US$ 20 million in two tranches of US$ 10 million. The first tranche will be available upon finalisation of security documentation, which is expected shortly, and the second tranche will be available upon the fulfillment of certain conditions to the lenders satisfaction. The facility may be used for capital expenditure, general corporate and working capital purposes. It will be repayable by 31 December 2016 and is subject to minimum amortisation milestones. Vitol may require repayment of the loan if there is a change of control of Beacon Hill or the Minas Moatize Mine or if the Coal Marketing Agreement is terminated.
Read the article online at: https://www.worldcoal.com/coal/19032012/beacon_hill_resources_and_vitol_coal_announce_strategic_marketing_partnership/