Coal of Africa Limited Update on Acquisition of Coal Assets

TIDMCZA

RNS Number : 3295M

Coal of Africa Limited

15 August 2011

ANNOUNCEMENT 15 AUGUST 2011

UPDATE ON THE ACQUISITION OF RIO TINTO'S SOUTH AFRICAN COAL ASSETS

Coal of Africa Limited ("CoAL" or "the Company") advises that irrevocable undertakings from the vendor shareholders have been obtained in terms of the Sale and Purchase Agreement ("SPA") entered into on 26 November 2010 for the acquisition by the Company of the Chapudi Coal Project and Related Exploration Properties (collectively, the "Coal Assets") in South Africa's Soutpansberg coal basin in the Limpopo province, from joint venture companies held by Rio Tinto Minerals Development Limited and Kwezi Mining (Proprietary) Limited (collectively, the "Vendors").

The SPA has been extended to allow for the remaining regulatory approvals required, including Ministerial consent in terms of section 11 of the Mineral and Petroleum Resources Development Act for the Company's acquisition of the Coal Assets, to be obtained. The date for fulfillment of the conditions precedent has accordingly been extended from 12 August 2011 until 30 April 2012.

JOHN WALLINGTON

Chief Executive Officer

For more information contact:

John Wallington Chief Executive Officer Coal of Africa [phone]

Wayne Koonin Finance Director Coal of Africa [phone]

Shannon Coates Company Secretary Coal of Africa [phone]

Chris Sim/Romil Patel Nominated Adviser Evolution Securities [phone]

Jos Simson/Emily Fenton Financial PR Tavistock [phone]

Melanie de Nysschen/ Annerie Britz/ JSE Sponsor Macquarie [phone]

Yvette Labuschagne

www.coalofafrica.com

About CoAL:

CoAL is an AIM/ASX/JSE listed coal mining and development company operating in South Africa. CoAL's key projects include the Vele Colliery (coking coal), the Makhado Project (coking coal) and the Mooiplaats and Woestalleen Collieries (both thermal coal).

The Mooiplaats Colliery commenced production in 2008 and is currently ramping up to produce 2 million tonnes per annum ("Mtpa"). CoAL's Vele Colliery and Makhado Project are expected to start production in the first half of 2012 and the first half of 2013 respectively. These operations are targeted to collectively produce an initial 1Mtpa ramping up to a combined annual output of 10Mtpa of coking coal.

In 2010, CoAL completed the ZAR467m acquisition of NuCoal Mining (Pty) Limited ("NuCoal"), a thermal coal producer with assets in South Africa in close proximity to CoAL's Mooiplaats Colliery. NuCoal owns the Woestalleen Colliery, which has a number of off-take contracts in place and processes approximately 2.5Mtpa of saleable coal for domestic and export markets. The Woestalleen Colliery also incorporates two beneficiation plants with a total processing capacity of 350,000 run of mine feed tonnes per month.

In November 2010, CoAL agreed to acquire the Chapudi coal project and several other coal exploration properties in the Soutpansberg coal basin in South Africa from the previous owners, including Rio Tinto. When completed, the acquisition of these projects will significantly extend the scale and scope of certain of CoAL's existing projects in the region and will more than double the resource of the existing Makhado Project.

This information is provided by RNS

The company news service from the London Stock Exchange

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