Junior coal miner MC Mining wants to raise R472m for its Makhado Project in Limpopo via a fully underwritten rights issues, the company said on Tuesday, as it looks to become the premier producer of hard coking coal in SA.
MC Mining, valued at R806m on the JSE, owns the majority stake in the Makhado Project in the Soutpansberg coalfield about 15km north of Louis Trichardt. The hard coking and thermal coal opencast project has 188.3Mt in reserves.
Coking coal is key in the production of iron and steel in blast furnaces. Coal prices have soared since the start of the Covid-19 pandemic, reaching record highs recently as the war in Ukraine continues.
“With record global coal prices, this is a very exciting time for MC Mining,” CEO Godfrey Gomwe said. “The fundraising process has been undertaken in tough equity markets, particularly for junior coal miners, and it is very pleasing to have the support of our large shareholders.”
MC Mining will use the money from the rights issue for infrastructure, confirmatory and geotechnical drilling, securing equipment and to satisfy a requirement from debt funders for its flagship project.
The planning and early works of the project are expected to start as soon as the money is raised and construction in early 2023. MC Mining believes the project will create 650 jobs.
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