CAPE TOWN, Sept 26 (Reuters) Australian coal miner GVM Metals Limited said on Wednesday it had sealed a preliminary agreement to buy a 60 percent stake in South Africa's Tshikunda Mining Pty Limited.
GVM Managing Director Simon Farrell said the deal was part of its bid to expand its reach in South Africa's coal-rich northern Limpopo province.
''Whilst very limited work has been undertaken on the area in the past, it is now widely considered to be highly prospective as a significant source of hard coking coal,'' Farrell said in a statement.
''What is particularly exciting is that both Rio Tinto and ourselves believe the rank of coals improve eastwards of their Chapudi and our Baobab projects, and given that the value of coking coal is now roughly double that of thermal coal, the dependence of a proximate power station to get the project up and running starts to disappear.'' South Africa is the world's fifth-biggest coal producer and is becoming increasingly important as a source as demand grows in the booming economies of China and India.
REUTERS DKS HT2100