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Coal of Africa said yesterday the stake was purchased through its JSE listing based on the previous 15-day volume weighted average share price.
In addition, ArcelorMittal South Africa has secured an option to enter into an offtake agreement for 2.5 million tonnes of metallurgical coal per annum from Coal of Africa and has also won the option to boost this in the future.
Coal of Africa said ArcelorMittal was seeking to mitigate one of its key variable input costs by increasing the quantity of local coal fed into its South African furnaces.
ArcelorMittal is now the second-biggest shareholder of Coal of Africa, with black economic empowerment company Africa Management Limited owning a 17.3% stake.
Coal of Africa’s Makhado hard coking coal project has a resource of 1.335 billion tonnes and its 74%-owned Vele coking coal project has a resource of 721Mt.
First thermal coal export sales from the company’s Mooiplaats project are expected in the current June quarter.
Coal of Africa shares traded up 15c this morning on the Australian Securities Exchange to $A1.08.
