Media coverage

24 NOVEMBER 2011

CoAL surges on green accord

Source: www.moneyweb.co.za
Author: Christy Filen|

Agreement aims to set new benchmark in mining.

JOHANNESBURG - The share price of Coal of Africa (JSE:CZA) (CoAL) jumped by 10.3% to 662c on Thursday following the announcement of a collaboration agreement between its Vele Colliery and environmental groups.

The Vele colliery, 48km west of Musina, recently had its water use licence suspension lifted and has all the environmental approvals in terms of the MPRDA and National Environmental Management Act. Planned start-up for phase 1 production at a rate of 1 million tons per annum (mtpa) is set for January.

A sustainable approach to mining is the belief and commitment of CoAL’s management team. “The objectives of both parties are not mutually exclusive and we need to find an overlap” said chief executive, John Wallington. Yolan Friedmann, the chief executive of the Endangered Wildlife Trust and spokesperson for the Save Mapungubwe Coalition (SMC) said it was “this approach by CoAL’s management team that triggered the coalition to enter into negotiations.”

Both parties are in agreement that the memorandum of understanding (MOU) is the first move towards outlining best practice in the industry.

Next steps will be to conclude a detailed Memorandum of Agreement (MOA) by February outlining the management and mitigation of the impact of mining and related activities at the colliery on the environment. This is to include the impact on water and heritage resources.

Friedmann said that the coalition wanted operations to act at the highest possible standards and if negotiations were to fall apart then it reserved the right to re-instate its legal proceedings. One of the conditions of the MOU was that the SMC would withdraw its application for a final and temporary interdict against CoAL.

“Despite this the SMC wants to build trust and make the MOU work,” Friedmann added.

Wallington echoed this sentiment saying it was critical to work together as mining contributed to the economic development of the country. “It is nonsensical to wish the mining industry away in South Africa – we need to match the likes of Australia and Chile and create wealth at the standards required.”

Wallington said it was too early to quantify the potential cost the collaboration may have.

The implications for CoAL’s next planned development (Makhado) are potentially positive Wallington said. “If success is achieved at Vele then it can be replicated at Makhado.”

CoAL and the SMC indicated that both parties are aware that the tough work lies ahead to ensure a successful co-existence.