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WSL - Wescoal Holdings Limited - Legal Dispute at Khanyisa Colliery

Release Date: 14/03/2011 12:39:00      Code(s): WSL
WSL - Wescoal Holdings Limited - Legal Dispute at Khanyisa Colliery             
WESCOAL HOLDINGS LIMITED                                                        
(Incorporated in the Republic of South Africa)                                  
(Registration number 2005/006913/06)                                            
JSE Share code: WSL  ISIN:ZAE000069639                                          
("Wescoal" or the Company)                                                      
LEGAL DISPUTE AT KHANYISA COLLIERY                                              
Shareholders are referred to the article in the Business Day today regarding a  
disgruntled contractor, Sutha Civils ("Sutha"), which claims R15, 2 million from
Wescoal Mining (Pty) Limited ("Wescoal Mining"), a wholly owned subsidiary of   
Wescoal. Sutha has also laid a fraud charge against "West Coal Mine", it is     
assumed that the fraud charge was intended for Wescoal Mining. The fraud charge 
appears to relate to Sutha`s belief that there are discrepancies in tonnages    
reported to the market and what was actually produced at Khanyisa.  No further  
information regarding this charge has been made available to Wescoal.  Sutha is 
threatening to apply to court for a liquidation order against Wescoal Mining    
Wescoal would like to advise shareholders of the following facts:               
*    Sutha commenced mining in February 2010 and during the period February to  
July 2010 it came to the Company`s attention that there were numerous       
    issues relating to overcharging by Sutha;                                   
*    By July 2010 Sutha had not responded to or corrected these issues;         
*    During September and October 2010 there were irregularities regarding      
diesel use by Sutha;                                                        
*    On a mine visit in November 2010 Wescoal instructed Sutha to stop mining   
    overburden and only extract coal, which Sutha ignored; and                  
*    Sutha was instructed to cease mining operations at Khanyisa in December    
Wescoal has obtained legal advice that Wescoal Mining does not owe any money to 
Sutha and Wescoal Mining is considering instituting a civil claim against Sutha 
for approximately R3, 5 million. Wescoal Mining categorically denies            
discrepancies between tonnages reported to the market and actually produced. Any
application for liquidation of Wescoal Mining is totally unfounded and malicious
and will be opposed.                                                            
14 March 2011                                                                   
Exchange Sponsors                                                               
Date: 14/03/2011 12:39:00 Supplied by www.sharenet.co.za                     
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