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FLSmidth confirms potential deal with Ledjadja Coal

World Coal,

Danish company FLSmidth has confirmed reports in South African and Australian media that the company has signed a term sheet with Ledjadja Coal for the supply of a coal material handling system and a coal preparation plant.

Last year, Ledjadja Coal awarded a mandate to various banks and financiers to provide funding for the construction of mine facilities at the Boikarabelo coal project.

The two companies intend to negotiate and conclude several contracts regarding the supply of the coal material handling system and coal preparation plant.

In a statement, FLSmidth said: “If and when the contracts are finalised and become effective, we shall immediately inform the market.”

The company said that to be considered finalised and effective, such contracts require not only signing but also exchange of down payment and guarantees, etc.

The deal would offer welcome relief for FLSmidth, following concerns over the company’s profit forecast that were exacerbated by a fall in share prices in October of 5%.

FLSmidth CEO Thomas Shulz said at the Reuters Nordic Investment Summit that he expected the downwards trend in mining capex to continue to the end of 2014.

“We expect a smaller decline next year but still a decline, Shulz said.”

FLSmidth said it was continuously negotiating many potential contracts on the global market. 

Edited from various sources by Sam Dodson

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