The government approval follows the introduction of a new black economic empowerment group to the Ledjada joint venture developing the project, which has agreed to acquire the 26% stake of the project held by the original BEE.

Sydney-based ResGen expects the formal mining right documentation to be executed in the next three weeks.

“This is a major step towards the development of the Boikarabelo mine,” ResGen managing director Paul Jury said.

“We expect that the mining right will facilitate our discussions with Eskom regarding coal supply to its power stations in Mpumalanga and with Transnet regarding transport to domestic customers and ports.

“We have worked closely and transparently with the Department of Mineral Resources throughout the approval process and I would like to acknowledge the assistance provided by our new BEE partners.”

The project has plenty of scope for expansion and holds 745Mt of probable reserves based on 35% of its identified resource area.

First-stage development is targeting 12Mtpa run-of-mine for 6Mtpa of thermal coal production over five years, with half slated for export markets.

Depending on offtake arrangements, ResGen would ideally like to ramp up the open cut mine to 40Mtpa of raw coal production under second-stage development.

ResGen shares are up 5.4% to 97.5c this morning.