RPG Group firm CESC Ltd has decided to invest $10 million to gain a 4.8% stake in Resource Generation which is a listed Australian mining firm. It made the investment using Bantal Singapore Pte Ltd, which is a Singapore based subsidiary that CESC owns wholly. The decision to buy a 10% stake in the company had been made last year.
The $10 million deal will buy CESC, the flagship power company of the group, 12,195,122 shares in Rescource Generation. The price per share is $0.82. This brings up the interest of RPG Group to 11.6% in the Australian miner.
Resource Generation has also signed a long term deal with Integrated Coal Mining to buy coal from its planned mine in South Africa. The Integrated Coal Mining Limited is also part of the RPG Group and will buy almost 139 million tonnes from the Boikarabelo mine over a period of 38 years. This is up from the current 37 million that it was to purchase over 20 years in the original contract signed in September 2010.
CESC will use the additional coal to power a 1,320 MW power plant that it wishes to set up to feed power to the South African grid. They are hoping to construct the coal fired power station adjacent to the Boikarabelo Mine in South Africa. The first phase of coal purchases is slated for 2013 when 73 million tonnes will be sold to CESC from the mine.