Coal of Africa signs coal trading deal

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.

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.

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.

Recommended

Share tips of the week – 21 January
Share tips

Share tips of the week – 21 January

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
21 Jan 2022
Seven cheap defence stocks to buy now
Share tips

Seven cheap defence stocks to buy now

We’ve got used to a world without war between major powers, but that era is coming to an end as Russia threatens Ukraine and China eyes Taiwan. Buy de…
21 Jan 2022
Invest in VCTs: tax-free investments set to break records
Investment strategy

Invest in VCTs: tax-free investments set to break records

Generous tax breaks make VCTs – venture capital funds – an attractive supplement to pensions.
21 Jan 2022
HubSpot: a tech stock set to tumble
Trading

HubSpot: a tech stock set to tumble

US tech stocks have had a fantastic couple of years. But this year is unlikely to be so bullish for high-fliers that can’t turn big profits.
18 Jan 2022

Most Popular

Ask for a pay rise – everyone else is
Inflation

Ask for a pay rise – everyone else is

As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why yo…
17 Jan 2022
Temple Bar’s Ian Lance and Nick Purves: the essence of value investing
Investment strategy

Temple Bar’s Ian Lance and Nick Purves: the essence of value investing

Ian Lance and Nick Purves of the Temple Bar investment trust explain the essence of “value investing” – buying something for less than its intrinsic v…
14 Jan 2022
US inflation is at its highest since 1982. Why aren’t markets panicking?
Inflation

US inflation is at its highest since 1982. Why aren’t markets panicking?

US inflation is at 7% – the last time it was this high interest rates were at 14%. But instead of panicking, markets just shrugged. John Stepek explai…
13 Jan 2022