(Alliance News) - Thungela Resources Ltd on Friday said it has agreed to acquire a majority interest in Sungela Holdings Pty Ltd.

The Rosebank, South Africa-based coal miner said the agreement, with Audley Energy Ltd and Mayfair Corporations Group Pty Ltd, will also see Sungela acquire an 85% interest in the Ensham joint venture through its subsidiary Sungela Pty Ltd.

The majority share in the Ensham joint venture will be purchased from Idemitsu Australia Pty Ltd, alongside its 85% shareholding in Ensham Coal Sales Pty Ltd, its 100% stake in Ensham resources Pty Ltd and its 85% holding in Nogoa Pastoral Pty Ltd.

The Ensham project, in the Bowen Basin in Queensland, Australia, produced 3.2 million tonnes of high-quality, low-ash and low-sulphur thermal coal in 2022, Thungela said. The underground mine has a life of mine though to 2039, with potential for future production to be increased.

The company said the purchase comprises of a subscription of AUD267 million, around GBP154.3 million, for an initial 75% shareholding, and then a AUD68 million mezzanine loan from Thungela to its co-investors Audley Capital and Mayfair.

Thungela said the co-investors will use the loan, along with their own capital, to subscribed for a 25% shareholding in Sungela for a total of AUD73 million.

The company said: "The transaction delivers on Thungela's strategy, by providing geographic diversification through a highly cash generative thermal coal asset, with long-life potential, at an attractive valuation, and puts Thungela in a position to capitalise on the current strong Newcastle coal price environment."

Thungela shares were down 0.2%, trading at 1,037.00 pence per share on Friday morning in London. Thungela traded 1.9% lower at ZAR21.821 in Johannesburg.

By Harvey Dorset, Alliance News reporter

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