MC CEO David Brown
Photo by: Creamer Media's Dylan Slater
The Industrial Development Corporation of South Africa’s (IDC’s) credit committee has approved a R245-million loan facility for ASX-, Aim- and JSE-listed MC Mining for the construction of Phase 1 of its Makhado hard coking coal project, in South Africa’s Limpopo province.
The term loan reaffirms the economics of the Makhado project and follows the conclusion of offtake agreements for the coal to be produced by Phase 1, MC said on Monday.
The loan will be used to develop the west pit at Makhado and modify the existing Vele Colliery processing plant, with construction expected to take nine months. First coal production will start thereafter.
“The approval of the IDC funding is a positive step for the development of MC Mining’s flagship Makhado project.
“The company is positioned to become South Africa’s pre-eminent producer of high-grade metallurgical coal with long-term hard coking coal markets supported by growing global steel demand, driven by economic development and urbanisation,” MC CEO David Brown commented.
Drawdown of the loan can take place any time before June 30, 2021.
Capital repayment will start 24 months after the first drawdown and the amount is repayable in 20 equal quarterly instalments.
The Makhado project is 69% owned by MC Mining’s subsidiary Baobab Mining & Exploration. The IDC holds a 5% interest, seven local communities a 20% interest and a black industrialist the remaining 6%.