Sharenet Sites 
Sharenet Sites
Grindrod Settlement
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")
Grindrod Settlement
Coal of Africa Limited ("the Company" or "CoAL") is pleased to announce that it has reached an
agreement (the “Settlement Agreement”) with Grindrod Corridor Management Proprietary Limited
and Terminal de Carvão da Matola Limitada (“TCM”), both subsidiaries of Grindrod Limited
(“Grindrod”), for the settlement of both historic and future liabilities, up to the end of December
2016, remaining under the current terms of the August 2008 Throughput Agreement (“Throughput
Agreement”). Under the Throughput Agreement the Company secured long term port allocation
through the Matola Terminal in Maputo, Mozambique (“Matola Terminal”) operated by TCM. The
Throughput Agreement commenced in 2009, continuing for renewable periods expiring at the end of
2028.
The Throughput Agreement provided the Company with an initial export allocation of 1 million
tonnes of coal per annum (“Mtpa”) through the Matola Terminal, with the right to secure up to 100%
of any increased capacity in return for participation in the funding of the proposed expansion. The
first phase of expansion at the Matola Terminal was concluded in 2010, increasing CoAL’s total
allocation to 3 Mtpa and its take or pay obligation to approximately 2.25 Mtpa. The locking-in of port
capacity resulted in the Company becoming exposed to take or pay obligations whereby a fee is
payable for annual capacity not utilized. The Company’s previously announced turnaround strategy
included the closure of the loss making Mooiplaats Colliery, disposal of the Woestalleen complex
and cessation of production at Vele in anticipation of the plant modification at the colliery, resulting
in no coal production and exposing the Company to its take or pay obligations in terms of the
Throughput Agreement. The Company partially mitigated this exposure by “sub-leasing” its capacity
to third parties but as a result of the differential in rail costs between the Maputo and Richards Bay
rail corridors, was unable to totally offset its 2.25 Mtpa commitment.
The settlement with Grindrod will result in a $10 million payment settled in two tranches;
US$6million at the end of October 2014 and US$4million by the earlier of 5 days after receipt of the
Stage 2 Placement of the proposed equity raise announced on 26 August 2014, or the end of
December 2014. The payment will settle the current liabilities recorded to date as well as cover all
future take or pay obligations until 31 December 2016. The potential take or pay liability for these
periods would have been significant assuming an annual take or pay obligation of 2.25 Mtpa and
this settlement will materially mitigate any future exposure. The Company will be able to export coal
during the settlement period with no take or pay obligations and has sufficient export capacity to
meet scheduled production from the Vele Colliery to the end of CY2016. The terms of the
Throughput Agreement will be renegotiated for a further two five-year periods and one further two-
year period commencing CY2017, ensuring the Company has sufficient capacity to export coal
produced by its Vele Colliery and Makhado Project.
David Brown, Chief Executive Officer of CoAL, commented:
“The Settlement Agreement results in certainty for CoAL shareholders and eliminates the
Company’s exposure in the 2014, 2015 and 2016 calendar years while preserving access to the
port capacity for future production. The Company has assessed its funding options which include
the completion of the recently announced equity raise and the execution of the sale of its non-core
assets. The equity raise will enable the company to free itself from these legacy issues and start the
process of rebuilding value for all stakeholders. This agreement demonstrates management’s
continued execution of the Turnaround Strategy in resolving all material legacy issues.”
Mr Brown also noted: “CoAL and Grindrod have a long standing relationship and the settlement
promotes a future relationship beneficial to both parties and their shareholders”.
Authorised by
David Brown
Chief Executive Officer
Page | 2
27 August 2014
For more information contact:
David Brown Chief Executive Officer Coal of Africa +27 10 003 8000
Michael Meeser Chief Financial Officer Coal of Africa +27 10 003 8000
Celeste Harris Investor Relations Coal of Africa +27 10 003 8000
Tony Bevan Company Secretary Endeavour Corporate Services +61 08 9316 9100
Company advisors:
Jos Simson/Emily Fenton Financial PR (United Kingdom) Tavistock +44 20 7920 3150
Chris Sim/George Price/Jeremy Ellis Nominated Adviser Investec Bank plc +44 20 7597 5970
Charmane Russell/Jane Kamau Financial PR (South Africa) Russell & Associates +27 11 880 3924 or
+27 82 372 5816
Investec Bank Limited is the nominated JSE Sponsor
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 /MbeuYashu, including CoAL’s Makhado Project (coking and thermal coal).
Page | 3
Date: 27/08/2014 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
