| Wed 27 Jun 2012, 9:23 | | RSG - Resource Generation Limited - Resgen signs Transnet contract |
|
RSG
RSG
RSG - Resource Generation Limited - Resgen signs Transnet contract
Resource Generation Limited
Registered in Australia under the Corporations Act, 2001 (Cth) with
registration number ACN: 059 950 337
ISIN: AU000000RES1
Share Code on the ASX: RES
Share Code on the JSE: RSG
("Resgen" or the "Company")
Resgen signs Transnet contract
Resgen has overcome its remaining major hurdle before proceeding to finalise
project finance for its Boikarabelo open-cut coal mine in the Waterberg region
of South Africa.
The company`s BEE subsidiary, Ledjadja Coal, has signed a ten-year take-or-pay
rail haulage contract with Transnet Freight Rail (TFR) to haul up to 6 million
tonnes of coal per annum.
`Having previously secured the major regulatory approvals, crossing this
bridge to finalise a contract with TFR will enable us to progress project
finance with banks, which have confirmed they are keen to provide funding.
Once all debt and equity funding is in place, we will then be able to begin
construction of the mine and infrastructure,` said Paul Jury, managing
director of Resource Generation.
`Our agreement with TFR is a significant step towards opening up the Waterberg
region which has one of South Africa`s largest remaining coal deposits.
Boikarabelo is a massive project which will provide a major boost to the South
African economy and create a substantial number of jobs for many years. We
can now see the light at the end of the tunnel and, if construction commences
in the last quarter of this year, production could start in late 2014 and we
can begin to supply our customers` contracts.
`We have had to make compromises in order to achieve a signed contract with
TFR, in particular agreeing to a condition for the allocation of capacity. We
are confident, however, that Ledjadja Coal will be provided with its required
allocation because our studies show that sufficient rail capacity for our
target production should be available once TFR has completed the minimal
upgrade works that are required. We have indicated we are prepared to
complete these works for TFR if there is a delay.`
The main terms of the contract are as follows:
- The initial term is for 10 years with provision to extend for a further
10 years.
- The contract allows for 4 million tonnes in the first year, 5 million
tonnes in the second year and 6 million tonnes per annum thereafter.
Should Eskom elect to contract directly with TFR (which is Eskom`s
intention) for the proposed domestic purchases (currently under
negotiation), the take-or-pay quantities in the contract will reduce to
export tonnage only.
- The contract specifies an indicative tariff for the current year. The
actual tariff will be determined annually by negotiation.
- The contract is conditional on Ledjadja Coal completing construction of
the 36 kilometre rail link to the existing rail network.
- The contract is also conditional on TFR completing its processes to
determine a fair, proportional and equitable allocation of rail capacity
to all interested parties from the Waterberg. If these are not completed
by 31 December 2012, this condition is automatically waived and the above
tonnage allocation becomes firm.
Sydney
27 June 2012
JSE Sponsor:
Macquarie First South Capital (Proprietary) Limited
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 or 0411 852 448
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. Stage 1 of the mine
development targets saleable coal production of 6 million tonnes per annum.
Date: 27/06/2012 09:23:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
