BHR Mining Mauritius, a subsidiary of BHR Mining, and Global Minerals & Metals (GMM), a subsidiary of Global Coke, have entered into a formal agreement under which GMM will purchase all the coking coal produced by the Minas Moatize mine.
The coal will be delivered for sale at either Port Biera or Port Nacala Free-on-Board (FOB) at a price linked to the prevailing hard coking coal benchmark price, assuming similar quality and specific parameters, with a 4% discount.
As part of the agreement, GMM has paid a deposit of $5m against initial shipments of coal and will purchase all the coking coal produced by the Minas Moatize mine, for the life of the mine.
In tandem with Global Coke, the group has also commenced reviewing the feasibility of establishing a metallurgical coke manufacturing facility in Mozambique, to market the coke produced to African markets.
Once established, coking coal can be delivered at the mine gate, direct to the coking ovens, instead of on FOB basis.
BHR Mining remains in discussions with the vendors of Minas Moatize to allow the final payment in respect of the acquisition to be made in conjunction with the completion of the subscription in BHR Mining by GMM on 30 November 2010.
