Initially, KDG will invest $12.97m for a 13.04% stake in MC Mining. Credit: Maksim Safaniuk/Shutterstock.

Coal mining and trading group Kinetic Development Group (KDG) has signed an agreement to acquire a 51% interest in South African coal miner MC Mining for around $90m (R1.59bn), payable in two tranches.

As part of the agreement, KDG will subscribe for a 51% share of MC Mining. This investment is poised to advance MC Mining’s Makhado project into production and expedite the company’s strategy for developing tenements in the Vhembe region of Limpopo Province.

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These tenements include the Greater Soutpansberg Projects (GSP) and the Vele Aluwani Colliery (Vele).

Initially, KDG will invest $12.97m for a 13.04% stake in MC Mining. The price per share is set at $0.2089, with the transaction expected to be completed by 4 September 2024.

The second tranche payment of $77.03m will follow, subject to shareholder and regulatory approvals.

MC Mining chairman Mathews Senosi said: “The transaction reaffirms the quality of assets that MC Mining has been nurturing over a number of years. We are pleased to have finally achieved our objective to be in a position to finalise full financing for the Makhado Project as the start of a growth journey that we look forward to embarking on with excellent partners.”

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The partnership is expected to transform MC Mining into a diversified international coal mining group. It will also enable the Makhado project to become South Africa’s largest hard coking coal operation.

KDC board chairman and executive director Wenzhong Ju said: “The investment in MC Mining is the next step of our intent to diversify and deepen both our product mix between thermal and steelmaking coal as well as extend our geographic footprint into prospective and high-growth regions, taking advantage of our access to both high-quality financial and human resources for the coal sector.”