South African focused coal company Continental Coal has struck a key off take agreement for coal from Continental’s production of export thermal coal product from its Vaalbank, Project X and Vlakvarkfontein Coal Mines with EDF Trading.
EDF is a leader in the international wholesale energy markets and a wholly-owned subsidiary of EDF SA, Europe’s leading electricity producer.
Under the terms of the Heads of Agreement, EDF Trading has agreed in principle to provide Continental with a coal loan of USD 20 million through an advance purchase of thermal coal from the Vaalbank, Project X and Vlakvarkfontein coal mines.
Continental commenced mining activities at its Vlakvarkfontein coal mine in February 2010 and both the Vaalbank and Project X mines are forecast to commence production of an aggregate 2.4 million tonnre per annum of export coal in 2011.
Under the agreement EDF Trading has also agreed to an off take agreement with Continental that will see them secure thermal coal production from these mines for an initial period of 20 years at a market API4 benchmark price FOB Richards Bay. Continental has agreed to the issue to EDF Trading of 40 million options at AUD 0.05 and 40 million options at AUD 0.10 subject to any necessary shareholder approvals. The Heads of Agreement is subject to final binding legal agreement.
Mr Bruce Buthelezi MD of Continental Coal Limited said that the benefits of securing funding and off take from one of the world’s leading energy traders was compelling and something we believe will deliver a significantly beneficial outcome for the company and most importantly, enable us to deliver first production of export coal in early 2011.
http://www.steelguru.com/news/index/2010/04/03/MTM5NjE0/Continental_Coal_strikes_off_take_deal_with_EDF_Trading.html
Friday, April 2, 2010
Continental Coal strikes off take deal with EDF Trading
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