Kangala is Universal’s first operation. It will be a domestic thermal coal project supplying primarily to South African electricity utility Erskom.

The first coal delivery is expected by mid-2014.

The approval by the board has allowed the appointment of key contractors. These include Stefanutti Stocks Mining Services as the mining, infrastructure and engineering, procurement and construction management contractor, and Mineral Resource Development as the processing operator and, in conjunction with PJ Technology, plant construction contractor.

Stefanutti Stocks Mining Services will supply the mining machinery and skill set to run the initial eight-year Wolvenfontein pit, operating a fleet of 60t trucks, 85t excavators and supporting equipment.

The dual-circuit processing facility – a 350tph crushing and screening circuit plus the 200tph DMS washing plant – will be owned by Universal, but the operation thereof will be outsourced to Mineral Resource Development.

The company secured financing for the project with a South African bank in September.

Rand Merchant Bank agreed to provide 65% of the project financing for Kangala, a master finance deed for future Universal projects and a transactional banking arrangement for the explorer.

The company secured further financing through a $14.2 million private placement transaction with Coal Development Holdings.

The transaction included some 96 million shares representing a 30% interest in the company.

CDH is a special-purpose entity of African Minerals Exploration & Development Fund, a private equity mining investment fund that will provide strategic support to Universal.

Through this transaction, CDH has nominated David Twist and Carlo Baravelle to sit as non-executive directors on Universal’s board.

Twist is a founding partner of the fund and has a proven track record in taking large-scale African projects into production.