UPDATE 1-China group to boost Coal of Africa as loss widens
* HEI to inject $100 mln into CoAL for 23.6 pct stake
* CoAL FY pre-tax loss widens on higher labour, capital costs
JOHANNESBURG Oct 1 (Reuters) - A unit of Beijing Haohua Energy Resource Co Ltd has offered to inject $100 million into Coal of Africa (CoAL), the junior miner said on Monday, after full-year pre-tax losses tripled due to higher labour and capital costs.
CoAL said the equity funding offer from Haohua Energy International (HEI) came after diversified miner Exxaro chose not to exercise its option to acquire a 30 percent stake in CoAL's Makhado coking coal project.
The proposed deal would be executed in two stages, allowing HEI to subscribe for up to $100 million of ordinary shares in CoAL at 25 pence per share. After the deal, which is subject to a number of conditions, HEI will own 23.6 percent of CoAL.
"The placement would expedite the development of CoAL's projects and lead to the formation of a strategic partnership and provide direct exposure to the world's largest coking coal market," CoAL chief executive John Wallington said in a statement.
HEI's parent is a Beijing-based coal producer and the largest exporter of anthracite coal from China.
CoAL has two operating collieries in South Africa, producing thermal and coking coal for the domestic and export markets, and other projects in development.
The mining company, which is also listed in London and Sydney, said adjusted operating pre-tax losses for the year to the end of June widened to $32.8 million from $10.1 million the previous year.
The jump was due to higher labour costs given increases in mining activity at its Mooiplaats colliery, once-off capital raising project costs and the exclusion of an asset sold during the financial year.
Revenue was down to $243.8 million from $261.4 million, with coal sales hit by a 27 percent drop in export coal spot prices.
CoAL's shares in Johannesburg are down 71 percent so far this year, compared with a nearly 12 percent jump in the All-Share index. The stock plummeted nearly 18 percent last week after some of the company's staff at its Mooiplaats colliery went on a strike over wages.
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