Coal of Africa announced that it was made aware by Transnet Freight Rail of a derailment of 10 wagons on the Matola rail corridor on 18 February 2013 and, as a result, all rail traffic between Komatipoort and Maputo has been suspended.

Based on current information, the suspension will last a minimum of seven weeks. In the interim, Transnet Freight rail is attempting to establish alternative routes to the Matola Port, which has so far proved unsuccessful.

Accordingly, Coal of Africa advises that its subsidiaries, Limpopo Coal Company (the holding company for the Vele Colliery), Langcarel (the holding company for Mooiplaats) and NuCoal Mining (the holding company for Woestalleen), have issued force majeure notices to their customers, contractors and other affected stakeholders.

It will implement measures at all operations to mitigate the commercial and operational impact of this force majeure. Production at Mooiplaats and Woestalleen will continue until stockpile capacity is reached. The existing stockpiles at Vele are at full capacity and have resulted in the temporary suspension of production. This suspension will preserve cash resources by reducing costs as the colliery is currently in developmental and product testing phase. Vele Colliery’s essential services will continue and a buffer contingency plan has been initiated to enable production to restart within 24 hours once Transnet Freight Rail resumes operations on the Matola corridor.

Coal of Africa will continue to provide updates on material developments as they occur.