Forbes looking to acquire additional mining rights - CNBC Africa

Forbes looking to acquire additional mining rights

Southern Africa

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“We do currently have some opportunities to acquire mining rights in our region that could be an extension to our property. Part of the funds that we raised, we utilise for that. The balance would be for working capital,” Theron, the president and CEO of Forbes and Manhattan Coal, told CNBC Africa on Monday.   

“From our perspective, as investors, we do see it as a good opportunity right now as the prices are depleted because of the weak pricing environment and tough equity markets. There is a significant opportunity to acquire more assets here and to also potentially consolidate in the junior coal space.”

The quality thermal and metallurgical coal producer obtained a 6 million dollar loan from Resource Capital Funds – their biggest shareholder. A good portion of the loan will go into expanding their presence in South Africa.

Forbes Coal has two operating mines in the country, Magdelena and Aviemore. Both are located in Dundee, a coal mining town in KwaZulu-Natal.

“We’re in a good position in that we have existing infrastructure so it’s not that we’re waiting for government to make further investment in our region. That Kwazulu-Natal area actually has got a really good rail network that allows us to get into Richards Bay,” Theron explained.

Further investment is needed in both coal mining and the infrastructure around coal mining in South Africa. In order to ensure a rail network is there to service the export sector, he believes that it is the government that needs to make it happen.

“I think the challenge is further North in the country, in the emerging Waterberg region and the Limpopo area where there’s some new coal properties being developed. It’s simply a case of government needing to step up to put the necessary infrastructure in place.”