COAL OF AFRICA LIMITED - Coal of Africa engages with strategic partners

Coal of Africa engages with strategic partners

Coal of Africa Limited
Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
ISIN AU000000CZA6
JSE/ASX/AIM share code: CZA
("CoAL or the "Company" or the "Group")


                                                                              1 October 2012


  Coal of Africa engages with potential strategic partners for the development of its
                                   attractive project pipeline


Coal of Africa (“CoAL or the Company”) announces an update on discussions with Exxaro
Coal Proprietary Limited ("Exxaro") and other strategic partners for the development of the
Company’s Makhado coking coal Project, South Africa.


Following an extensive exchange of information and evaluation of the project by the
technical teams from CoAL and Exxaro Coal Proprietary Limited ("Exxaro"), Exxaro has
decided not to exercise its right to participate in the development of the Makhado coal
project. Consequently Exxaro will not use its pre-emptive right to a 30 percent interest in the
project. Coal of Africa had considered this potential outcome and in parallel, embarked on
the process outlined above to increase the number of options available to the Company.


CoAL CEO, John Wallington, said, “CoAL has had extensive engagements for the past four
months with several potential strategic partners, including Exxaro to participate in the
development of the Makhado Project. Although current global markets are weak, we remain
confident in the long term fundamentals of the metallurgical markets and the potential value
creation of the Makhado Project.”


Further details of the outcome of this process are set out in a separate announcement
released today.

Sipho Nkosi, Exxaro CEO commented, “It is after serious consideration that we decided not
to take up the Makhado option. We have had to consider the various alternative projects
currently in our growth pipeline and also the current negative sentiments regarding the global


LIB01/C1AH/2667204.1                                                               Hogan Lovells
and local macro-economic growth outlook, and will therefore need to focus on our top
priorities. We thank CoAL for the excellent co-operation of the past number of months and
wish them all the best in their endeavours.”


In a statement released today, Exxaro confirmed that the Makhado project represents a
significant developmental hard coking coal asset in Limpopo.


John Wallington said, “While we are disappointed that Exxaro has decided not to pursue its
option, we are encouraged that we have concluded a transaction with a strategic partner that
will provide the financial and technical resources to develop the Makhado and other projects
in the group”.


The Makhado Project is CoAL's most advanced exploration stage development project with
the results from detailed product tests confirming a 10% hard coking coal product with a high
quality thermal coal by-product. The project, located in the Soutpansberg coalfield, has an
approximate life of 16 years and is at an advanced stage in the application for a New Order
Mining Right. Finalisation of the various regulatory approvals is expected by late CY2013 to
early CY2014.Further details on the project are available at the Company’s website,
www.coalofafrica.com.

Authorised by
JOHN WALLINGTON
Chief Executive Officer


For more information contact
John Wallington                      Chief Executive Officer           Coal of Africa              +27 11 575 4363
Wayne Koonin                         Financial Director                Coal of Africa              +27 11 575 4363
Sakhile Ndlovu                       Investor Relations                Coal of Africa              +27 11 575 6858
Jos Simson/Emily Fenton              Financial PR (United              Tavistock                   +44 20 7920 3150
                                     Kingdom)
Chris Sim/Neil Elliot                Nominated Adviser                 Investec Bank plc           +44 20 7597 5970
Robert Smith                         JSE Sponsor                       Investec Bank Limited       +27 11 286 7000
Charmane Russell/                    Financial PR (South Africa)       Russell & Associates        +27 11 880 3924 or
Jane Kamau                                                                                         +27 82 372 5816


About CoAL:
CoAL is an AIM/ASX/JSE-listed coal exploration, development and mining company operating in South Africa. CoAL’s key
projects include the Vele Colliery (coking and thermal coal), the Greater Soutpansberg Project, including CoAL’s Makhado
Project (coking coal) and the Mooiplaats and Woestalleen Collieries (both thermal coal).


About Exxaro

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Exxaro Coal Proprietary Limited is a subsidiary of Exxaro Resources Limited. Exxaro Resources Limited is a JSE-listed
diversified resources group and a constituent of the JSE’s Top 40 companies index. It has direct and indirect interests in the
coal, mineral sands and iron ore commodities. The group has operations and a strong pipeline of projects in South Africa,
Australia, Republic of Congo and China. At year end 2011 Exxaro had assets of R37 billion.




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