The transaction follows recent government approval for the sale of the Rio and Kwezi subsidiaries which hold the prospecting rights for the coking coal tenement and its related exploration properties in the country’s northern Limpopo province.

Coal of Africa chief executive officer John Wallington said consent from the minister of mineral resources marked the conclusion of regulatory prerequisites and established his company as one of the primary holders of prospecting and mining rights for coking coal in the area.

“The transaction provides significant scale and optionality in the planning of future mining projects and will enable the consolidation of several contiguous tenements in the Soutpansberg coalfield,” he said.

“The detailed planning and technical work required as part of this process has commenced with our partners, while the reserve and resource calculations of these newly acquired coal assets are being evaluated and a further update will be issued to the market in due course.”

A deposit of $2 million has already been paid by Coal of Africa subsidiary Keynote Trading and Investment, which includes Rothe Investments on its board of directors as a 26% stakeholder under the government’s black economic power initiative.

Coal of Africa is an emerging developer and producer of high-quality thermal and coking coal with projects in northern and eastern South Africa.