Coal of Africa shares up almost 20%

Coal of Africa shares rise almost 20% after go-ahead given for Vele Colliery in SA

Wed,06 July,2011

Coal of Africa Ltd said it received environmental consent for its controversial Vele Colliery in South Africa, although it will have to abide by special conditions due to the project's proximity to a UNESCO World Heritage Site.

Shares in the company rose 19.78% to R9.68 at 13:45 on Wednesday.

The company halted some work at its Vele colliery last August after the government said it had broken environmental laws.

Construction at Vele is expected to be completed within six to nine months from the restart, the company said on Wednesday, before Vele is ramped up to initial production of 1 million tons a year.

"This development is a further significant step towards the re-opening of the mine," said chief executive John Wallington.

The company did provide details about the special conditions.

Its shares in London have dropped 25 percent since some of the work at Vele was halted to close at 72.5 pence on Tuesday, valuing the company at about £390 million. (By Reuters)