| Wed 26 Oct 2011, 10:44 | | RSG - Resource Generation Limited - Transnet MOU signed |
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RSG
RSG
RSG - Resource Generation Limited - Transnet MOU signed
Resource Generation Limited
ACN 059 950 337
(Incorporated and registered in Australia)
(Registration number ACN 059 950 337)
Share code on the JSE Limited: RSG ISIN: AU000000RES1
Share code on the Australian Stock Exchange Limited: RES ISIN:
AU000000RES1
("Resgen")
Transnet MOU Signed
Further to Resource Generation`s announcement on 19 October 2011, the
company is pleased to report that the memorandum of understanding
(MOU) has now been signed by Transnet Freight Rail (TFR).
Under the MOU, TFR has agreed with Resource Generation`s BEE
subsidiary, Ledjadja, to haul Boikarabelo coal on a take or pay basis
as follows: 4 million tonnes in the year commencing 1 July 2014, 5
million tonnes in the year commencing 1 July 2015 and 6 million tonnes
per annum from 1 July 2016. 50% of the coal will be hauled to export
ports and 50% to the Mpumalanga Highveld, which is where Eskom`s power
stations are located. Freight rates are yet to be determined but will
reflect commercially fair and reasonable terms.
Whilst rail capacity currently exists, upgrade works on the existing
line between Lephalale and Pyramid South have been identified and need
to be completed before coal haulage can commence. Ledjadja has agreed
to undertake the upgrade works if TFR agrees. These works are minor
and able to be completed prior to the forecast commencement of mining.
Ledjadja has also agreed to work with TFR to unlock additional
capacity from the Waterberg.
The haulage agreement is conditional upon Boikarabelo commencing to
produce coal, the upgrade works being completed and the rail link from
Boikarabelo to the existing network being completed. The rail link is
part of the capital expenditure of the Boikarabelo mine and ownership
and operations of the rail link will be transferred to TFR in due
course with compensation to be negotiated. The rail link is intended
to be a common user facility. The agreement is also conditional on
TFR completing its Waterberg Feasibility Study aimed at unlocking a
potential haulage capacity of 22.5 million tonnes per annum from the
Waterberg and formal allocation of capacity by TFR.
Ledjadja and TFR have agreed to enter into negotiations to complete a
definitive long term coal haulage agreement.
Paul Jury, managing director, said: `It is pleasing that we have been
able to complete this first step in working with Transnet to open up
the Waterberg coalfields. Whilst it is a binding agreement, its
conditionality prevents it from triggering a move to project funding.
We will be making every effort in the next few months to finalise the
contract which will be necessary to complete the funding required to
develop the Boikarabelo mine.`
Sydney, Australia
26 October 2011
Contacts
Paul Jury, Managing Director on (02) 9376 9000 or
Steve Matthews, Company Secretary on (02) 9376 9000
Media enquiries
Anthony Tregoning (02) 8264 1000
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited
Resource Generation is developing the Boikarabelo coal mine in the
Waterberg region of South Africa where there are probable reserves of
744.8 million tonnes of coal on 35% of the tenements under its
control.
Date: 26/10/2011 10:44:01 Produced by the JSE SENS Department.
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