Sept 24 Forbes & Manhattan Coal Corp said on Monday it plans to acquire two South African coal mines from a unit of Rio Tinto in a bid to boost its output and enlarge its footprint in Africa.
Forbes will acquire 74 percent of the Zululand Anthracite Colliery (ZAC), a producing anthracite mine, and the Riversdale Anthracite Colliery (RAC), an undeveloped anthracite resource, the company said.
The transaction involves a base payment of 440 million rand ($54.08 million). In addition, Forbes will also pay an annual revenue share of 10 percent on incremental revenue above 850 million rand until 2025.
"The acquisition of ZAC significantly accelerates Forbes Coal's goal of becoming a 3-4 million tonne producer ... we expect to be producing almost 2.5 million tonnes in less than a year's time", Chief Executive Stephan Theron said in a statement.
The ZAC mine has produced an average 700,000 tonnes of coal per year over the last five years, the company said.
Forbes had a second-quarter total run of mine (ROM) production of 414,551 tonnes of coal.
It will finance the acquisition with a 396 million rand debt facility and cash on hand.
The company's shares closed at 65 Canadian cents on Monday on the Toronto Stock Exchange.