Australian mining company Coal of Africa Limited (CoAL) has borrowed extra funds from South African-based bank Investec.

CoAL announced last Wednesday that they have secured US$58.7 million debt and equity funding from Investec. This announcement follows recent reports that CoAL shares dropped by 10% over a five-day period due to the United Nations’ (UN) concerns over CoAL’s Vele mine near the Mapungubwe World Heritage Site in Limpopo.

CoAL says they will use the funds for key items at their Makhado Project, additional funding for the production ramp-up at the Vele Colliery and for general working capital purposes. Currently, CoAL is awaiting the outcome of a new order mining right application from the Department of Mineral Resources.

CoAL also indicated that it has the right to require Investec to subscribe for up to a maximum of 81 061 507 CoAL shares in tranches over a period of a year.

The chief executive officer for CoAL, Mr John Wallington, said the debt and equity financing package signalled good support for CoAL’s long-term growth strategy. “Progress continues to be made at Vele, with the coking coal test work and the finalisation of the Phase 1 capital project to enable the achievement of the initial target of 1 million tonnes per annum,” said Wallington.

CoAL said they were also continuing to consider various long-term debt and equity financing options in relation to the expected construction and development costs for the Makhado project, following the granting of the mining right, and has involved three international investment banks in this process. This funding would be in addition to the potential investment in and co-funding of the Makhado project by Exxaro, pursuant to Exxaro’s option to acquire and interest in up to 30% of the project.

In the meantime, the public participation process for the draft environmental management plan (EMP) on CoAL’s Soutpansberg Project closed on Wednesday, 25 July.