Kinetic Development Group to invest US$90 million in MC Mining
MC Mining has announced that the Company has reached an agreement with Hong Kong Stock Exchange (HKSE) main board listed Kinetic Development Group Limited (KDG) that KDG (or its designee) will subscribe for a total of 51% of the post transaction issued share capital of MC Mining.
The proposed investment by KDG will not only advance MC Mining’s flagship Makhado steelmaking, hard coking coal project into production, but is also expected to accelerate the broader strategy of the group to develop its various tenements in the Vhembe region of Limpopo Province, including the Greater Soutpansberg Projects (GSP) and the Vele Aluwani Colliery (Vele). KDG is an integrated coal mining and trading group with extensive operational experience and expertise, and a successful history of production from its assets that it operates in the autonomous regions of Inner Mongolia and Ningxia, China for over a decade.
Under the terms of the agreement, KDG will subscribe for an initial 13.04% of MC Mining for an aggregate consideration of US$12,970,588 which subscription shall be effected no later than 5:00 pm Hong Kong Time on 4 September 2024, subject to the satisfaction of certain conditions. The second subscription for the remaining aggregate US$77,029,412 will be effected within seven (7) business days of the fulfilment or waiver of the conditions precedent applicable to that subscription including obtaining shareholder approval at an Extraordinary General Meeting (EGM) and receiving all relevant regulatory approvals.
The transaction is expected to:
- create a diversified international coal mining group with operations in two of the fastest growing continents in the world;
- unlock the potential of the Makhado steelmaking, coking coal project to become the largest hard coking coal operation in South Africa providing opportunity for import substitution for local large scale industry;
- leverage cross pollination of international best practice and local knowledge from the skills available to KDG and MC Mining to minimise implementation risk and optimise operational efficiency across the MC Mining projects;
- facilitate, due to the scale of the projects planned, deployment of new capital to develop business support infrastructure such as logistics and utilities delivery;
- result in direct investment into a region with a deep, supportive and skilled labour pool; and
- enable MC Mining to take advantage of business development incentives offered by the adjacent Musina Makhado Special Economic Zone further creating vertical integration opportunities for industrial development of the region
The proposed EGM is expected to be held before the end of 2024
KDG is an integrated coal mining group listed on the HKSE and has a current market capitalization of over US$1.2 billion 9. KDG’s business covers the full coal value chain including mining, processing, logistics and marketing. The key coal resource under operation of the Group is the underground thermal coal Dafanpu Coal Mine.
MC Mining is a coal exploration, development and mining company operating in South Africa. MC Mining’s key projects include the Uitkomst Colliery (metallurgical and thermal coal), Makhado Project (hard coking coal), Vele Colliery (semi-soft coking and thermal coal), and the Greater Soutpansberg Projects (coking and thermal coal).
