The transaction secures access to long-life resources from South Africa’s principal coal field in Mpumalanga, which has established infrastructure for the transport of export quality thermal coal.
In addition the transaction also secures access to an eventual 1.5 million metric tonnes of export allocation in Phase V of the Richards Bay Coal Terminal.
Umcebo currently has three thermal coal mines in operation (Middelkraal, Kleinfontein and Klippan) and a stand-alone wash plant, with an aggregate annual production capacity of 7.2 million run of mine metric tonnes.
In addition, the Wonderfontein mine is scheduled to begin production in 2013, with a long-term annual production capacity of 3.6 million run of mine metric tonnes.
Glencore believes that Umcebo has an attractive pipeline of further development projects with attributable resources of at least 860 million metric tonnes.
Tor Peterson, director of Glencore's coal/coke department, said: “This investment in Umcebo is an attractive addition to our South African coal business, giving us access to the Mpumalanga coal field and eventually providing us further export capacity at Richard’s Bay.”