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Transport of Coal Agreement
Resource Generation Limited
Registration number ACN 059 950 337
(Incorporated and registered in Australia)
ISIN: AU000000RES1
Share Code on the ASX: RES
Share Code on the JSE: RSG
(“Resgen” or the “Company”)
Transport of Coal Agreement
Resource Generation Limited (ASX:RES) (Company), through its subsidiary, Ledjadja Coal Pty
Ltd (LCL), has today in South Africa signed a binding Transportation of Coal Agreement (TCA)
with Transnet SOC Limited (acting through Transnet Freight Rail)(Transnet) for the purposes of
delivering to 3.6mtpa of export quality coal to a Richards Bay Terminal on a ‘take or pay’ basis.
Containing 40% of South Africa’s coal reserves, the Waterberg is the next viable coal field in
South Africa. Consistent with the South African Government’s national strategic imperative
[Strategic Infrastructure Projects (SIP) 1 of the National Development Plan – i.e. unlocking the
Northern Mineral Belt using the Waterberg as a catalyst], Transnet has the Waterberg rail
capacity expansion process with the Revised Stage 2-3 of the Waterberg Expansion Programme
already underway. The expanded rail capacity will ensure that coal from LCL’s Boikarabelo Coal
Mine and other future neighbouring mines is transported to the intended end users.
Papi Molotsane, Interim CEO said “this is an important milestone towards achieving financial
close for the Project”
The key terms of the Transport of Coal Agreement are set out below:
. The TCA has a 10-year term commencing from 1 June 2022 on a take or pay basis;
. Contracted tonnage of 3.6mtpa with the ability to move additional tonnage from time to time
based on Transnet capacity offers;
. A concessional tariff arrangement for the first 40 months of the agreement however there is
a subsequent alignment (if necessary) with the whole of industry arrangement that will
commence from 01 April 2024; and
. Tariff arrangement to include a ‘commodity price participation modifier’ which increases the
tariff when the API#4 commodity price trades within a specified range.
The Agreement also provides for the recovery of the capital outlay for the NSF (Network Stabilising
Facility) on a per railed tonnage basis over the period 1 June 2022 to 31 March 2024. Any capital
outlay not recovered through railings over this period will be forgone.
The Agreement is subject to certain conditions precedent including:
Resource Generation Australia (ACN 059 950 337)
c/o Level 1, 17 Station Road, Indooroopilly, QLD, 4068
GPO Box 126, Albion QLD 4010. Phone +27 (012) 345 1057 Fax +27 (012) 345 5314
Directors: Lulamile Xate (Chairman), Robert Croll, Dr. Konji Sebati,
Colin Gilligan, Leapeetswe Molotsane, Greg Hunter, Michael Gray www.resgen.com.au
Interim CEO: Leapeetswe ‘Papi’ Molotsane
. Completion of an unconditional funding agreement for the 44km rail link to the Transnet
main line;
. Completion of an unconditional port capacity agreement;
. Construction of the rail link by 31 January 2022 and the commissioning of the
Boikarabelo Mine by 30 May 2022;
. Construction of the Revised Stage 2-3 of the Waterberg Expansion Programme by
Transnet by 1 June 2020; and
. Finalisation of a Service Level Agreement in relation to the TCA
The Company continues to engage constructively with the proposed Lending Syndicate on
finalising common terms for the mine funding package. The execution of binding agreements
for the logistics aspects of the Project, including the transport of the export quality coal to
Richards Bay, will be a condition precedent to any such funding agreement reaching
completion i.e. financial close.
21 November 2019
Lulamile Xate
Chairman
For and on behalf of the Board
About Resgen:
Resource Generation Limited (Resgen) is an emerging ASX and JSE-listed energy company,
currently developing the Boikarabelo Coal Mine in South Africa’s Waterberg region. The
Waterberg accounts for around 40% of the country’s currently known coal resources. The Coal
Resources and Reserves for the Boikarabelo Coal Mine, held through the operating subsidiary
Ledjadja Coal, were recently updated based upon a new mine plan and execution strategy. The
Boikarabelo Coal Resources total 995Mt and the Coal Reserves total 267Mt applying the JORC
Code 2012 (ASX Announcement :23 January 2017- In accordance with Listing Rule 5.23.2 the
Company confirms that it is not aware of any new information that would impact on the Reported
Coal Resources and Coal Reserves). Stage 1 of the mine development targets saleable coal
production of 6 million tonnes per annum. Ledjadja Coal is a Black Economic Empowerment
subsidiary (BEE) operating under South Africa’s Broad-based Black Economic Empowerment
Act, Section 9(5): Codes of Good Practice
ResGen’s primary shareholders are the Public Investment Corporation of South Africa (PIC),
Noble Group and Altius Investment Holdings.
For further information please contact:
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Mike Meintjes, Company Secretary on mmeintjes@resgen.com.au or +61 413 706 143
Media enquiries:
South Africa: Marion Brower on +27 11 880 3924
JSE Sponsor:
Deloitte & Touche Sponsor Services (Pty) Limited
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Date: 21/11/2019 09:04:00
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