Keeping South AfricaBURNING BRIGHT

Keeping South Africa BURNING BRIGHT A

s it nears completion of its third mine in South Africa, Continental Coal is already looking forward to future operations. Following

rapid expansion since the company began as an exploration company at the beginning of 2010, the company is about to embark on a $160 million project to open its fourth mine, De Wittekrans, in the next two years.

The impressive growth path of the company has been carefully executed through a number of partnerships and an artful balance

of asset sales and equity in order to fund new projects to meet the market demand for thermal coal.

CEO Don Turvey has been at the heart of developments within the business. He explained: “It’s really a well established business, and we are still on the growth path. The third mine, which we commissioned last year, is in the production expansion mode and should be in full production in the second half of this year. Our fourth mine, which we are working very hard on now to get that funded is in the regulatory process.”

Continental Coal

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Continental Coal is extracting returns from all of its operations, ensuring rapid growth in the mining sector as it completes its third site and begins a new development

Written by: Ella Copeland & Produced by: Alex Barron >>>

Developing through collaborationAccording to Turvey, partnerships have been key to the development of the company, which recently arranged a new deal with Village Main Reef, an established precious metals mining company.

“We’ve managed to tie up some good partnerships, firstly with EDF in 2010 and later in 2010 with KORES, a Korean mining company or resource company. We also have a Black Economic Empowerment deal with the Sishen Iron Ore Company Community Development Trust. Recently, Village Main Reef came on board as one of our cornerstone investors. All of those strategic partnerships really set the company on a course for growth, not only in South Africa but in

Botswana as well. The major transformation in the

last few years has been gained not only by partnerships but also through a number of acquisitions, asset sales and equity agreements. In order to secure its rapid development, the management at Continental have been resourceful in the way it sources capital.

“The challenging thing, especially in the junior mining space, is procuring funding and we’ve been quite successful in the way we’ve structured the business to secure this funding. For some of them we had to do coal off-take agreements, other places we sold assets to secure funding, convertible notes, and using the equity market, we’ve signed up with ABSA Capital for the funding for our third mine,” said Turvey.

It’s really a well established business, and we are still on the growth path. The third mine, which we commissioned last year, is in the production expansion mode and should be in full production in the second half of this year”— Don Turvey, CEO

Continental CoalKeeping South Africa Burning Bright

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The company relies on its strong relationships with a number of contractors and labour suppliers to keep its operations running smoothly. By keeping these partnerships at the centre of the business, Continental Coal ensures that the different companies can work together smoothly and ensures the longevity of its partnerships.

“I think we’re particularly proud of our suppliers on the open cast part of mining services. These are long term relationships and we are proud to be associated with them. It’s these companies that are really adding value to our business. By managing the relationship with regular update meetings these companies are an integrated part of our business and operations meetings, you won’t see the difference between a contractor and our own employees,” explained Turvey.

Social ResponsibilityThe ethos at the heart of Continental Coal’s operations is to look after the community and environment surrounding its projects. In an effort to combat unemployment in South Africa, the company has founded two businesses to employ local people, which they are hoping will

Don Turvey, CEO

Vlakvarkfontein Coal Mine

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become self-sustaining in the next few years.

“We would train a certain amount of operators from the community and provide the opportunity for them to gain employment with a local business. We also provide adult basic education for the community,” said Turvey.

“We have social and labour plan projects for job creation – we’re currently running two projects, one where we’ve set up a lavender farm and also we’ve set up a tissue manufacturing business and trained up people to run those businesses to become self sustaining,” he continued.

Future expansionWith a wealth of explorations, development sites and new projects in the pipeline, Continental Coal is looking to continue with its ambitious expansion policy over the next few years, both in South Africa and beyond. Currently catering to the inland, export and domestic markets, Turvey plans to continue expansion in response to a rising demand in the domestic market.

“We have a pipeline of projects. There is a smaller project called Leiden, which we are applying for a mining right, we are working with Total Coal on our Vaalbank project and are considering how we will

develop that. We are exploring partnerships with other parties looking at developing our Botswana assets. So it’s a plan that covers all these projects in the planning process and the projects are at various stages of maturity,” he explained.

“The plan is to become a mid tier mining company; we plan to do that through organic growth and selective M&A transactions in South Africa, in addition to looking at other jurisdictions. From a coal supply perspective we’re also keen to look beyond thermal coal into coking coal, and really develop into an international mid tier Coal Company,” concluded Turvey.

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STATISTICS

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Industry: Mining

Founded: 2010

Headquarters: Fredman Towers, Sandton, Johannesburg, South Africa

Key PeoPle/tItles: Don Turvey, CEO

servIces: Mining and exploration services

revenue: FY12 AU$82m

emPloyees: 580 inclusive of contractors

WebsIte: www.conticoal.com

Visit us online:

Continental CoalKeeping South Africa Burning Bright

The ethos at the heart of Continental Coal’s operations is to look after the community and environment surrounding its projects

Continental Coal’s Johannesburg office

Continental Coal Ltd

9th Floor Fredman Towers13 Fredman DriveSandton 2196Republic of South Africa

Tel: +27 (0) 11 881 1420Fax: +27 (0) 11 881 1423

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