CZA Coal of Africa

 

TIDMCZA 
 
RNS Number : 9113Z 
Coal of Africa Limited 
30 September 2009 
 

 
 
 
 
 
 
ANNOUNCEMENT 
                   30 SEPTEMBER 2009 
BLACK ECONOMIC EMPOWERMENT TRANSACTION FINALISED 
  *  CoAL to issue 50 million options, representing approximately 10.85% of CoAL's 
  issued capital, to Firefly Investments 163 (Pty) Ltd ("Firefly") 
  *  Options to be exercisable at 60 pence each, expiring 5 years from the date of 
  issue, and subject to a 12 month "Lock-in period" 
  *  Firefly will also have the right to nominate two persons to the CoAL Board 
  *  African Global Capital I, L.P. ("AGC") and Coal Investments Limited ("CIL"), 
  which collectively own 17.33% of the issued share capital of CoAL, have agreed 
  to cede their voting rights to Firefly 
 
Coal of Africa Limited ("CoAL" or the "Company"), the AIM/ASX/JSE listed coal 
mining and development company operating in South Africa (ticker: CZA), is 
pleased to announce that it has reached agreement with its Broad Based Black 
Economic Empowerment ("BBBEE") partners. The agreement will be immediately 
implemented to ensure compliance with South African legislative requirements for 
black empowered groups to hold at least a 26% participation in mining companies 
by 2014 and to pave the way for the Company's long term future in South Africa. 
Firefly, which is wholly owned and controlled by historically disadvantaged 
South Africans, will lead the BBBEE consortium ("Consortium"). Firefly's current 
shareholders include Mosomo Investment Holdings (Pty) Ltd and Mtungwa Resources 
(Pty) Ltd, companies lead by Kgomotso Brian Mosehla and Patrick Ntshalishali. 
Firefly undertakes to, within a period of three months, distribute 
the options to the King of the VhaVenda from the Limpopo province, His Majesty 
Khosi Khulu Toni Mphephu Ramabulana, representing his constituents of the 
Mudimeli, Musekwa, Makushu-Musholombi and Tshivhula communities, relevant female 
empowerment and youth groups, as well as a special purpose vehicle to promote 
and develop  entrepreneurs  and other specific community groups in the Limpopo 
province. 
Commenting on the agreement, CoAL's Managing Director Mr Simon Farrell said 
"This is the culmination of a great deal of effort and consultation to ensure 
broad based community participation in the future success of CoAL. This historic 
agreement paves the way for CoAL's long term future in South Africa and our 
development projects. We are delighted that CoAL not only has community 
participation, but also community support for our development plans." 
Also commenting on the transaction, King Ramabulana stated "I am very happy for 
my people to be a part of Coal of Africa's BBBEE consortium. CoAL has committed 
to sustaining partnerships to deliver education, health and social initiatives - 
signifying its depth of commitment to the communities in which it operates. We 
are also looking at creating value for our communities through mining, like our 
counterparts in other parts of this country. The Kingdom of the VhaVenda is 
therefore appreciative of the opportunity to be a part of this Company and fully 
supports CoAL and its projects." 
CoAL has agreed to issue a total of 50 million options exercisable at 60 pence 
each, expiring five years from the date of issue to Firefly. This agreement 
replaces the arrangement previously announced on 13 June 2008 whereby CoAL had 
agreed to issue an option to acquire 50 million shares to CIL.  The options will 
be issued to Firefly, subject to Firefly not being able to exercise the options 
for a period of 12 months from the issue thereof. In addition, the issue of the 
options will be subject to certain regulatory approvals, including consent of 
the Australian Foreign Investment Review Board. The "in the money" options will 
represent approximately 10.85% of CoAL's issued capital upon being converted 
into ordinary shares. 
Firefly will also have the right to nominate two persons to the CoAL Board. 
To facilitate the BEE transaction the Company's second largest shareholder, AGC, 
an entity associated with Mvelaphanda Holdings (Proprietary) Limited, Palladino 
Holdings Limited and OZ Management LP, and its affiliate CIL, which currently 
hold in the aggregate 17.33% of the issued capital of CoAL, have entered into an 
agreement with Firefly in terms of which amongst other things, they will cede 
their voting rights over the ordinary shares of CoAL to Firefly. 
 
 
AUTHORISED BY: 
Simon Farrell 
Managing Director 
 
 
For more information contact: 
Simon Farrell, Managing Director CZA +61 417 985 383                 or     +61 
8 9322 6776 
Peter Bacchus/ Alastair Cochran                                Morgan 
Stanley+44(0) 20 7425 8000 
Simon Edwards/ Chris Sim                                           Evolution 
Securities+44(0) 20 7071 4300 
Jos Simson/ Leesa PetersConduit PR 
    +44(0) 20 7429 6603 
Melanie de Nysschen Macquarie First South Advisers+27(11) 583 2000 
 
 
About CoAL: 
Coal of Africa Limited ("CoAL") is an AIM/ASX/JSE listed coal mining and 
development company operating in South Africa.  CoAL has three key projects 
including the 113 million tonne ('mt') Mooiplaats thermal coal mine, the 656 mt 
Vele coking coal project and the 1 bn tonne Makhado coking coal project. 
 
 
The Mooiplaats coal mine commenced production in 2008 and is currently ramping 
up to produce 2 mtpa. CoAL's Vele and Makhado coking coal projects are expected 
to start production in H1 2010 and Q4 2011 respectively producing an initial 2 
mtpa rising to a combined annual output of 10 mtpa of coking coal. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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