Coal of Africa Ltd. rose the most in almost seven months in Johannesburg trading after estimated coal resources at a reserve in South Africa’s Limpopo province increased more than fivefold.
The stock advanced for a second day, climbing 9.2 percent to close at 5.33 rand, the biggest one-day gain since Nov. 24. Estimated resources in the Greater Soutpansberg area expanded to 8 billion metric tons from 1.5 billion tons, the company said in a statement yesterday.
The increase in available coal is a boon for Coal of Africa, whose shares have slumped 41 percent in a year as environmental concerns stalled the development of its Vele colliery near the Mapungubwe Hill ruins in Limpopo. The Perth, Australia-based company acquired rights to some of the Greater Soutpansberg coking- and thermal-coal assets earlier this year.
Coal of Africa plans to dig an annual 10 million tons of coking coal in Limpopo province, adding revenue of $2 billion to $3 billion in the next 10 years, Chief Executive Officer John Wallington said March 12. The company is building mines in an area that, together with neighboring Zimbabwe and Mozambique, may be as rich in coal as Australia’s Bowen basin, he said.