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Tuesday, January 10, 2012

CIL buying coal rights in Limpopo province of SA

Tuesday, 10 Jan 2012

Later this month Coal India Ltd will sign an agreement with the Limpopo government in terms of which it will receive mining rights on various coal blocks in that province.

CIL will not acquire mines that are already operational, but rather promising coal blocks where mines will be developed.

Sake24 source said that “CIL had received the blocks entirely free of charge after the Mozambican government asked permission to develop mines there. But they paid us several hundred millions.”

These mines will be developed in partnership with the government of Limpopo which, through a state controlled corporation, will retain a 26% interest in the mines, probably to devolve it to black empowerment partners for CIL to comply with the requirements of the mining charter.

The Sake24 source said that “The Limpopo government has already handed CIL a draft agreement which took many months of negotiation. This will be discussed at CIL’s next board meeting to be held in two weeks’ time. If the CIL board accepts it, a CIL delegation will visit the country during the week of January 21, during which the agreement will be signed and formally announced.”

A senior official in the Limpopo government told Sake24 that the provincial government was acting more as a broker in this transaction worth many hundreds of millions.

Limpopo Premier Cassel Mathale a confidant and friend of suspended ANC Youth League leader, Julius Malema, apparently last year invited CIL to participate in developing the province’s coal industry.

Last week in New Delhi Mr NC Jha chairman of CIL had said that the board would within the coming weeks consider a proposal in terms of which CIL would receive interests in coal mines in the province. together with the Limpopo government.

(Sourced from Sake24)

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