South Africa’s MC Mining gets $9.94 million funding to advance Makhado coal project

MC Mining Limited, an investment company focused on coking and thermal coal projects in South Africa, has secured $9.94 million in unsecured convertible promissory note funding from its controlling shareholder, Kinetic Development Group Limited and minority shareholder Eagle Canyon International Group Holding to accelerate construction of its flagship Makhado hard coking coal project in South Africa.

The funding marks a fresh capital injection aimed at sustaining development momentum at the Limpopo-based asset, while also supporting the group’s broader working capital needs as it advances toward production readiness.

MC Mining’s funding structure anchored on convertible notes

Under the arrangement, Kinetic Development Group will subscribe for $6.136 million in notes, while Eagle Canyon will provide $3.8 million, bringing total committed funding to $9.936 million.

The financing, which comes weeks after MC Mining ceded control to Kinetic Development Group (KDG) in a $90 million deal, handing the Hong Kong-listed coal producer 51% of the South Africa-focused miner, was structured through unsecured convertible promissory notes, allowing investors to either hold debt instruments or convert them into equity at a fixed conversion price of $0.2089 per share, subject to regulatory and shareholder approvals.

The notes may be drawn in tranches until September 30, 2026, and will mature 12 months after each drawdown, with interest accruing at a floating benchmark linked to Australian business lending rates plus a 3% margin.

Capital to accelerate Makhado development

Proceeds will be directed primarily toward the continued construction and commissioning of the Makhado project, MC Mining’s flagship hard coking coal asset in South Africa’s Limpopo Province.

Key workstreams include completion of coal handling and preparation plant civil works, expansion of open-cut mining operations, stripping of overburden, and associated contractor activities. The funding will also support critical infrastructure such as power supply lines, substations, and water pipelines required to transition the project toward commercial production.

Additional allocations will be used to support working capital and the ongoing management of MC Mining’s broader asset base, including its Uitkomst and Vele collieries.

Strategic backing from controlling shareholder

The transaction reinforces continued financial support from Kinetic Development Group, which remains MC Mining’s controlling shareholder, alongside participation from Eagle Canyon as a significant minority investor.

MC Mining said the structure provides flexible funding while maintaining alignment between shareholders during a capital-intensive development phase. The notes are unsecured and rank equally with the company’s other unsecured obligations.

The company will also seek shareholder approval for the conversion features of the notes, with a general meeting expected within regulatory timelines. MC Mining said it has already received voting intention commitments from shareholders representing more than 25% of its voting rights in support of the conversion resolutions.

Financing supports transition to production

The board said the funding package is designed to bridge MC Mining through the final stages of construction and commissioning, positioning the Makhado project for eventual commercial output.

The company operates across multiple coal assets in South Africa, with Makhado considered its most strategically significant development, given its focus on hard coking coal, a key input in steel production.

Further updates on project milestones and shareholder meetings are expected in the coming months as development progresses.