Acacia executive chairman Adam Santa Maria at Riversdale.

Acacia Coal buys South African project

Monday, 17 October, 2016 - 15:24
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Perth mining hopeful Acacia Coal will buy a 74 per cent interest in a South African metallurgical coal project from a subsidiary of Rio Tinto and undertake a $2 million capital raising, it announced today.

Acacia will pay $3.7 million cash for the Riversdale Anthracite Colliery project, with a further $2.6 million to be delivered through shares as it reaches milestones.

About $400,000 will be raised by placement to sophisticated investors, while $1.6 million will be garnered through an entitlement issue.

It will be underwritten by Argonaut.

That funding will pay for the acquisition in addition to working capital and expenditure on both the Riversdale and Comet Ridge coal projects.

Acacia executive chairman Adam Santa Maria said the Riversdale asset was capable of rapid development and near-term production.

It comes as metallurgical coal prices have rallied in recent weeks to be well above its level in the September quarter.

Mr Santa Maria said it would fit well into the local anthracite coal market with additional potential for export.

“Anthracite is a clean, smokeless coal with low volatiles, high fixed carbon content and has high value in a number of industrial applications, primarily as a reductant in the metallurgical extraction process,” he said.

“The South African minerals sector has a major and significant global market share of the chrome, manganese and minerals sands industries, as well as a sizeable steel industry.

“As South Africa does not have any significant and economic domestic deposits of low impurity metallurgical grade coal, anthracite has developed as the dominant reductant in the South African pyro metallurgical extractive industry.

“Demand for high-quality, low-impurity anthracite is increasing as existing mines near end of life.”

The company also announced today that former Potash Minerals chief executive Hugh Callaghan will be appointed managing director.

Shares in Acacia were unchanged at 0.5 cents each at the close of trading today.

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