Coal of Africa (CoAL) jumped over 10 per cent after it announced a marketing deal designed to boost exports of its coking and thermal coal.
The firm said it had signed a binding memorandum of understanding with the Vitol Group, making it the company's exclusive marketing agent for all export thermal and coking coal for eight years.
This does not include CoAL's Makhado site in South Africa where the marketing period is five years from the start of production.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The deal also excludes all coal subject to current agreements that are in place as well as any coal off-take that may be agreed with the company's strategic equity partners.
An agreement has also been reached between CoAL and logistics firm Grindrod, meaning CoAL is no longer obliged to fund its own share of the capital for the Phase 4 expansion of the TCM export terminal in Maputo.
CoAL Chief Executive John Wallington said the growing relationship with Vitol would assist his firm with mitigating any take or pay obligations at TCM as it developed its Vele and Makhado sites and begins exporting.
The firm's shares were trading up 10.5% at 1.75p by 0930.
-
NatWest sell-off moves closer as the government offloads more sharesThe UK Treasury's stake in NatWest has fallen to below 11% - here is what it means for the share price
-
When will the Labour government reform the leasehold system?Homeowners are still waiting for the controversial leasehold system to be reformed but are now facing more delays with at least seven new consultations
