UPDATE 1-Coal of Africa buys rest of S.Africa project

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LONDON, July 14 (Reuters) - South African miner Coal of Africa Ltd (CZA.L) (CZAJ.J) has agreed to buy the remaining 26 percent of the Vele coking coal project in South Africa, it said on Tuesday.

The firm (CZA.AX) -- listed in London, Sydney and Johannesburg -- already holds 74 percent of Limpopo Coal Company, which owns the Vele project.

Coal of Africa (CoAL) agreed to buy a 20 percent stake from Tranter Holding by issuing 5.625 million of its shares and 6 percent from Shangoni Bezwe Management Services for 1.99 million shares, a statement said.

"Completion of both transactions will take CoAL's interest in the Vele Project to 100 percent," it said.

The Vele project, which will sell coal to the South African unit of steel producer ArcelorMittal (ACLJ.J) (ISPA.AS), is being developed in two phases, the first of which will cost around 350 million rand ($42.27 million), the firm said in an update on Monday.

The first phase, which will produce around 1 million tonnes per year, is due to be launched as soon as approval is granted by the mining ministry, which is expected by the end of the third quarter. (Reporting by Eric Onstad) ($1=8.279 Rand)