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Coal of Africa (CZA:AIM) 94.5p

Coal production will begin in Q3 at Mooiplaats in South Africa. It should announce next week that it has secured the mining licence. Offtake agreements should be finalised by May including a deal with state energy group Eskom for domestic supply. It should start exporting coal in Q1, 2009 once a washing plant is built. Export prices have risen sharply in recent weeks. A $100 million financing deal is being fleshed out with a coal trader for working capital. Coal of Africa will probably sell its Holfontein deposit as it is too small for the group’s needs. Coking coal operations in the Limpopo region, Thuli and Baobab, should be good money makers. It has brought forward development plans by 18 months to start production in the first half of 2009. The firm hopes to sell domestically to Mittal Steel and export to India.