The allocation will meet the port allocation of 1Mtpa of coking coal exports from the company’s South African Vele and Makhado projects with mining at Vele anticipated to take place in the latter half of this year.

Successful negotiations also have CoA lending funds to expand the capacity of the Matola Terminal to triple the company’s allocation to 3Mtpa, with the work expected to be completed by August 2010.

CoA added the 3Mtpa allocation was in addition to a potential offtake agreement of up to 5Mtpa of coking coal with steel giant ArcelorMittal, subject to an executed letter of intent inked back in April 2008.

CoA managing director Simon Farrell said the rail allocation already secured on the Maputo corridor, along with the increased capacity at Matola, overcomes a huge logistical challenge.

“Furthermore, it potentially adds substantial value to the coking coal projects of Vele and Makhado now that the company has a clear and tested route to the export markets,” he said.

“In addition to the current expansion plans at Matola, a feasibility study for a further 10 million tonnes per annum increase in capacity is underway.

“Given that the company also has the rights to this additional capacity, CoA may secure a total of 13 million tonnes per annum export capacity via the Matola Terminal in addition to the potential 5 million tonnes per annum domestic offtake agreement with ArcelorMittal.

“This would provide CoA with the opportunity to deliver significant volumes of coking coal to global and domestic markets.”

Details of the funds to be loaned to Terminal De Carvao Da Matola Limitada for the expansion to secure an extra 2Mtpa were not provided by CoA.

CoA is expecting first sales from its key wholly owned Mooiplaats project in the second quarter of this year.

Coal of Africa shares closed down 3.55% at 81c on the Australian Securities Exchange yesterday.