MC Mining Ltd. announced the completion of a major milestone for the company through the signing of an off-take agreement with ArcelorMittal South Africa Ltd. (AMSA). The agreement results in AMSA purchasing hard-coking coal that will be produced from Phase 1 of the Makhado coking-coal project.
The agreement reaffirms the quality of Makhado’s hard-coking coal and follows the April announcement of an off-take with one of the world’s largest producers and marketers of seaborne-traded coal for all the byproduct thermal coal to be produced by Phase 1. South Africa has a very limited production of high-quality metallurgical (coking) coal, resulting in AMSA and other coke producers having to import hard-coking coal for the manufacture of metallurgical coke, a key ingredient in the production of steel.
AMSA will purchase a minimum of 350,000 metric tons (mt) of Phase 1 hard-coking coal annually and has the right to acquire a further 100,000 mt per year. The agreement will endure for the shorter of ten years or the Phase 1 life-of-mine.
The agreement is subject to various conditions precedent, including confirmation by December 15 that the requisite funding for the development of Phase 1 has been secured; and confirmation by June 30, 2020, that delivery of hard-coking coal will commence within six months.
