MC Mining Limited (MC Mining) has secured a significant investment partnership with Kinetic Development Group Limited (KDG), a company listed on the Hong Kong Stock Exchange's main board. The agreement outlines a two-part subscription by KDG for a total of 51% ownership of MC Mining's issued share capital after the transaction is complete. This strategic partnership positions MC Mining for substantial growth and development.

The proposed investment by KDG is set to advance MC Mining’s flagship Makhado steelmaking and hard coking coal project into production, while also accelerating the development of the group's broader strategy in the Vhembe region of Limpopo Province. This includes progress on the Greater Soutpansberg Projects (GSP) and the Vele Aluwani Colliery (Vele). KDG, an integrated coal mining and trading group based in the Cayman Islands, brings extensive operational experience and a successful production history from its assets in Inner Mongolia and Ningxia, China, where it has operated for over a decade.

Under the agreement, KDG will initially subscribe to 13.04% of MC Mining for a total of US$12,970,588, at an implied price per share of US$0.2089. This initial subscription is set to be completed by 5:00 pm Hong Kong Time on September 4, 2024. The remaining investment of US$77,029,412 will follow within seven business days of fulfilling or waiving the conditions precedent, which include obtaining shareholder approval at an Extraordinary General Meeting (EGM) and receiving relevant regulatory approvals.

The transaction is anticipated to create a diversified international coal mining group with a presence in two of the world's fastest-growing continents. It aims to unlock the Makhado steelmaking and coking coal project’s potential, positioning it as South Africa's largest hard coking coal operation and offering opportunities for import substitution for large-scale local industries. Additionally, it will leverage the integration of international best practices with local expertise from KDG and MC Mining, thereby reducing implementation risks and enhancing operational efficiency across MC Mining's projects.

The transaction is set to facilitate the deployment of new capital to develop essential business support infrastructure, such as logistics and utilities, due to the scale of the planned projects. It will also result in direct investment in a region known for its deep, supportive, and skilled labor pool. Additionally, MC Mining will be able to capitalize on business development incentives from the adjacent Musina Makhado Special Economic Zone, creating vertical integration opportunities and further industrial development within the region.

Mathews Senosi, Chairman of MC Mining, expressed his enthusiasm about securing high-quality investment from Kinetic Development Group, highlighting their strategic partnership as a significant milestone. He noted that the transaction validates the value of the assets MC Mining has developed over the years. Senosi also expressed satisfaction in achieving the goal of securing full financing for the Makhado Project, marking the beginning of a promising growth journey with strong partners.

Wenzhong Ju, Chairman of the board and executive director of Kinetic Development Group, emphasized that the investment in MC Mining represents a strategic move to diversify their product portfolio by balancing thermal and steelmaking coal. He highlighted that this investment also aims to expand their geographic presence into high-growth regions, leveraging their access to top-tier financial and human resources in the coal sector to support this expansion.