SOUTH AFRICAN COAL MINING HLDGS LTD - Proposed suspension of mining operations

Proposed suspension of mining operations

South African Coal Mining Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1994/009012/06
Share code: SAH ISIN: ZAE000102034
(SACMH or the company)

Proposed suspension of mining operations

Shareholders are advised that SACMHs subsidiary, Umlabu Colliery Proprietary Limited 
(Umlabu), has arrived at a point where the company has taken a decision to suspend 
mining operations and place the mine on a care and maintenance programme. The reasons 
are inter alia as follows:

* Reserves at the Mooifontein section of the colliery currently being mined will be 
depleted by the end of December 2012. 

* The company had planned to access the Voorslag reserve by now. However,  approval 
of the Water Use Licence Application (WULA) for the area has not been received and 
consequently mining operations cannot be started. Numerous interactions have taken 
place and additional studies and updates required have been submitted  to the 
Department of Water Affairs  over the last two years. 

* The global market prices of seaborne thermal coal have plummeted during this year. 
Consequently the company has been recording significant losses, as disclosed in its 
recent interim report. The Companys cost of production is in excess of the current 
market prices and the Company cannot sustain the operations and continue to incur 
such losses. 

Consequently the National Union of Mineworkers has been informed on 24th  October 
2012 that Umlabu contemplates the retrenchment of 64 employees. Consultations in 
terms of the Labour Relations Act will commence on a date to be determined by the 
Commissioner of  the Commission for Conciliation, Mediation and Arbitration which 
has been requested to facilitate the process.

Further announcements will be made in due course to keep shareholders abreast of 
developments.

24th  October 2012
Johannesburg

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