Ikwezi Signed an off-Take Agreement with Vitol for 3.96 Million Mt of Steam Coal

South African coal exploration and development firm Ikwezi Mining said Wednesday it had signed an off-take agreement with commodities trader Vitol for 3.96 million mt of steam coal over three years. 

Ikwezi, which is listed on the Australian exchange, said the 3.96 million mt volume represents the full scheduled production of its Ntendeka coal mine located in the KwaZulu-Natal coal fields in South Africa in which Ikwezi has a 70% equity stake. 

Under the agreement, Vitol will purchase the volume at a combination of fixed and API4 Richards Bay-linked pricing over a three-year period. 

Ikwezi said the off-take agreement was subject to its putting in place a funding facility within three months to bring the Ntendeka coal mine into production. 

Ikwezi managing director David Pile said in a statement submitted to the Australian Securities Exchange that the agreement with Vitol provided his company access to the latter's "extensive marketing network." 

Earlier this month, Vitol also signed a memorandum of agreement with South African firm Coal of Africa whereby Vitol has been appointed as an exclusive coal marketing agent in the overseas market.