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December 03, 2008


ArcelorMittal signs placement and off take agreement of Coal Africa Limited

ArcelorMittal confirmed that it has reached an agreement with Coal of Africa Limited, the coal development company operating in South Africa. ArcelorMittal will enter into an off take agreement with CoAL.

The agreement relates to two mines. The first, Baobab is 100% owned by CoAL has an estimated yield of 2.45 million tonne per annum. The second, Thuli is 74 % owned by CoAL has an estimated yield of 4.2 million tonne per annum. Both mines are located in the Limpopo Province of South Africa.

The agreement will take effect from commencement of mining operations at both mines expected by the end of 2009. Full production at both mines is expected to come on stream by 2011. ArcelorMittal will secure a minimum of 2.5 million tonnes per annum of coking coal from the two mines.

ArcelorMittal also has an option to increase its coal off take to 5 million tonne per annum and will also have the right to nominate one person to be appointed as a director of the Company following completion of the placement of shares. It has been agreed in principle that the coal will be delivered to the town of Musina in the Limpopo province, at a Free on Rail price linked to the FOB price of Kestrel hard coking coal sold by Rio Tinto and reported by Wood Mackenzie.

ArcelorMittal will subscribe to 60 million new ordinary shares in the sum of GBP 66.7 million which represents approximately 16% of CoAL's issued capital on a diluted basis.

Tranche 1 of the placement to ArcelorMittal is now complete. Accordingly, a total of 46,365,000 Shares have now been allotted and issued. Tranche 2 of the agreed placement to ArcelorMittal of 13,635,000 shares remains subject to approval by the Australian Foreign Investment Review Board. Terms and conditions of the of -take agreement are subject to final negotiations, completion of formal documentation and securing all relevant regulatory approvals.

Coal of Africa Limited is focused on the acquisition, exploration and development of thermal and metallurgical coal projects. The Company's key projects, along with its leading metals processing company NiMag Group Ltd are in South Africa.