Coal of Africa to Defend 'Vigorously' Against Rio Tinto Claim

By Alex MacDonald

LONDON--Coal of Africa Ltd. (CZA.AU) said Tuesday that it will defend its interests "vigorously" against a claim by a unit of Rio Tinto PLC (RIO) for a $19 million accelerated payment after alleging a breach of contract relating to the purchase of two coal assets in South Africa.

CoAL and fellow partner MbeuYashu agreed to purchase the Chapudi Coal and Kwezi Mining Exploration Pty Ltd. properties from Rio Tinto and Kwezi for $75 million in 2012. The two partners have already paid $56 million, leaving $19 million to be paid by June 15, 2017.

"CoAL and MbeuYashu have met, and will continue to meet all of their payment obligations to Rio Tinto and Kwezi," the London and Australia-listed miner said.

"On legal advice [however] CoAL will dispute the validity of the notice. If Rio Tinto and Kwezi pursue the matter, CoAL and MbeuYashu will defend it vigorously."

-Write to Alex MacDonald at alex.macdonald@wsj.com

(END) Dow Jones Newswires

March 08, 2016 03:20 ET (08:20 GMT)

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