It is reported that South African Coal Mining Holdings planned to raise ZAR 400 million through a combination of a rights offer, selling new shares, and debt. Of the ZAR 400 million to be raised, one quarter would come from a rights offering at ZAR 4 a share.

According to the report, JSE listed SACMH said that the money would go towards improving infrastructure at its Umlabu operations and building two new underground sections at the mine. This would lift production at the mine, near Middelburg by 57% to 150 000 tonnes per month.

According to the report, the company would then sell some ZAR 50 million shares, with the balance of the capital to come in the form of debt.

The company stated that Black owned Royal Bafokeng Capital holds an interest of 65% in SACMH and had committed to following its rights in the rights offer.

Of the new 150 000 tonnes per year capacity, the company said it would sell 40 000 tonnes per month to State owned Eskom, with some 60 000 tonnes per month exported through its increased Richards Bay Coal Terminal allocation.

Mr Karl Gribnitz CEO of SACMH said having established SACMH as a profitable black owned and controlled coal mining company, we are now making a major investment in the business to increase production substantially and to become much more efficient. The Umlabu plant upgrade and new siding will cut out the need for any toll treatment and use of other sidings in the area, meaning significant cost savings.