South African coal miner MC Mining has entered into an agreement with Hong Kong-listed coal mining and trading group Kinetic Development Group (KDG), which will acquire a 51% interest in MC Mining for about $90-million, payable in two tranches.

KDG will subscribe for an initial 13.04% interest in ASX-, JSE- and LSE-listed MC Mining for about $12.97-million, implying a price per share of about $0.21, A$0.31 and R3.72, by 17:00 Hong Kong time on September 4.

This will be followed by a second tranche payment of $77.03-million for further shares in the company.

Both tranches are subject to certain conditions precedent.

MC Mining says the proposed investment by KDG will not only advance MC Mining's flagship Makhado steelmaking, hard coking coal project into production, but is also expected to accelerate the broader strategy of the group to develop its various tenements in the Vhembe region of Limpopo province, including the Greater Soutpansberg Projects and the Vele Aluwani Colliery.

The transaction is expected to create a diversified international coal mining group with operations in two of the fastest-growing continents in the world.

"We are privileged to be in a position to attract high-quality investment from a strategic equity partner with the capacity and capability of KDG. The transaction re-affirms 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," MC Mining chairperson Mathews Senosi comments.

"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.

“We are enthusiastic about the long-term prospects of MC Mining and its potential as a substantive contributor in the industrial coal space in the region and exporter of high-quality coal products. We look forward to working with the MC Mining team and the company's broader stakeholders in realising what is a commendable vision that is aligned with our own," says KDG chairperson Wenzhong Ju.