www.snrplc.co.uk
SNR intends to develop, own and manage natural resource extraction enterprises in southern Africa. SNR will concentrate, initially, on managing the development of and the investment in the Elitheni Mine, in the Gubahoek/Macubeni area of the Eastern Cape. Further opportunities both in South Africa itself and elsewhere in the southern part of the continent will be followed up as they arise. The company’s main country of operation is the Republic of South Africa.
Strategic Natural Resources advance on coal supply deal in South Africa
Strategic Natural Resources (LON:SNRP) shares advanced around 6 per cent this morning with the news of a new deal to sell coal from the Elitheni coal mine.
The agreement was signed between SNR’s 74 per cent owned associate Elitheni Coal (Pty) Ltd and a government agency.
Elitheni will supply 70,000 tonnes of coal each year to a bio-ethanol plant that will built in South Africa’s Eastern Cape. The plant will produce its own power fuelled by Elitheni's coal, SNR said.
The shipments are expected to start in 2013.
A government backed finance institution, called the Industrial Development Corporation, is fully funding the bio-ethanol project.
"We are delighted to be a part of this IDC funded project,” said chief executive David Nel.
“Supplying our coal to local industry is a strategy we as a company have considered to be viable for a long time and it is encouraging to see our endeavours come to fruition after a great deal of interaction with the IDC.”
“Although Elitheni will primarily be an export mine, given its significant reserves, the company will continue to work with local industry with the aim of supplying coal for use in industrial steam and power production."
The supply agreement has an initial term of 20 years and during this time Elitheni would provide a total of 1.4 million tonnes of coal to the plant.
The coal will be sold at a fixed price, although it will be increased with inflation linked to South Africa's producer price index.
