Global coal operator Kinetic Development Group’s (KDG’s) wholly-owned special purpose vehicle Kinetic Crest has become the controlling shareholder of JSE-, ASX- and Aim-listed MC Mining, in which it holds a 51% interest.

This follows the April 22 issue and allotment to Kinetic Crest of 28.87-million new fully paid ordinary MC Mining shares, as outlined in a previously announced share subscription agreement for $90-million, payable to MC Mining in phases.

MC Mining describes the completion of the KDG subscription as a “defining milestone”, validating the strategic partnership between the company and KDG.

The cumulative $90-million of capital subscribed by KDG, together with the operational and technical know-how of the KDG group, has materially advanced the company’s strategy of becoming a significant producer of metallurgical coal in South Africa for export and regional markets, it adds.

With the KDG subscription now fully implemented and the Makhado project in South Africa’s Limpopo province in advanced construction and commissioning, MC Mining enters a new phase of its development as a producing metallurgical coal company.

MC Mining highlights several principal benefits realised by the company and its shareholders to date as a direct result of the KDG subscription, including the proceeds being deployed in accordance with the use of proceeds plan to fund the construction and commissioning of the Makhado project.

This includes overburden stripping, civil works at the coal handling and preparation plant, bridge construction, water supply pipelines, the 22 kV power supply main line and substation equipment, as well as supporting infrastructure.

The Makhado project is now in advanced construction with ongoing progress towards commissioning and joint trial operations.

Moreover, with the funding and operational support provided by KDG, MC Mining says it is on track to bring the Makhado project into production, with a further capacity expansion programme targeting total production of 800 000 t/y of hard coking coal and 700 000 t/y of thermal coal under design and testing.

This positions MC Mining as a meaningful new entrant in the global seaborne metallurgical coal market, the company avers.

Further, the capital injection has materially strengthened the company’s balance sheet, reduced reliance on short-term funding sources and provided the working capital base required to bring the Makhado project to first production and support group efforts of ensuring sustainability of MC Mining’s other projects.

There is also improved governance and oversight, MC Mining indicates.

BOARD CHANGES

Following completion of the subscription and the corresponding increase in shareholding, KDG has exercised its rights to nominate additional directors to the board, with effect from May 5.

Blagojce (Bill) Pavlovski has tendered, and the board has accepted, his resignation as a nonexecutive director.

The board extended its appreciation to Pavlovski for his stewardship and contribution as a director, particularly during the period in which the KDG subscription was negotiated, approved by shareholders and progressively implemented.

Pavlovski will continue in his capacity as company secretary, ensuring continuity of the company’s governance, secretarial and ASX and JSE compliance functions.

Guo Xin has been appointed a nonexecutive director as a nominee of KDG.

Xin holds dual bachelor’s degrees in Mining Engineering from the China University of Mining and Technology and in Geological Exploration Engineering from the China University of Geosciences, and is an Intermediate Engineer.

He has more than a decade of front-line experience in the coal industry with KDG subsidiary Inner Mongolia Zhungeerqi Kinetic Coal Industry, where he has progressed from technical specialist roles in fully mechanised mining and the general dispatching room to his current position as deputy chief engineer at the Dafanpu coal mine.

In that role, Xin is responsible for underground coal mining technical management, mining face design and roadway support, geological structure analysis, hydrological surveying and water-hazard prevention and control, technical innovation and safety oversight.

He is said to bring deep operational and technical expertise in large-scale coal mining and mine safety, which is directly relevant to the development and ramp-up of the Makhado project.

MC Mining says it is also further excited by the prospect, in due course, for Xin to be appointed to lead the operations of the company’s coal mining projects in South Africa as GM.

Further, Mei Zhang has been appointed nonexecutive director as a nominee of KDG.

Zhang holds a bachelor’s degree in Communication Signal Carrier Engineering from the Beijing University of Posts and Telecommunications.

She started her career as a communications engineer at the Guangzhou Telecommunications Bureau, before migrating to Australia in 1989.

She has subsequently held senior procurement and supply chain leadership roles in Australia.

Zhang is said to bring extensive experience in corporate governance, international procurement and supply chain management, together with a strong understanding of corporate compliance, board governance and risk control mechanisms developed in an Australian-listed company environment.

The board says her professional strengths in corporate governance, commercial management and strategic oversight will be of particular value to MC Mining as it transitions the Makhado project into production and scales its commercial activities, including in optimising governance structures, improving procurement approval systems and strengthening operational cost control.