JSE-listed Coal of Africa (CoAL) on Tuesday said its board has agreed to a R220 million ($22.1m) extension of the Vele Colliery, located in the north of South Africa.

The Vele Colliery spreads across ten farms with 8,663ha of land. Owned by Limpopo Coal Company, CoAL Africa has 80 percent stake in Limpopo Coal’s shares, with the remaining 20 percent held by Eyesizwe Coal.

The development aligns with the firm’s plan to focus on coking coal properties.

According to the company, the board’s approval came after the assessment and endorsement of Vele coal quality in August this year.

“As part of that process and in order for the colliery to reduce the current cash losses incurred, the colliery will cease production during October (this month) in order to prepare for the construction phase of the announced expansion,” CoAL said in a statement.

The firm has started raising money, signalling that the exercise will be completed by the end of March next year. After this, the firm will increase operations at the colliery in 2015, and the colliery will be in full swing at the close of that year.

“A collaborative and inclusive engagement process with the contractor companies operating at the mine has been concluded, with 49 people retained,” CoAL affirmed in the statement.

Based in South Africa, CoAL is an emerging developer and producer of high-quality thermal and coking coal. The company is also committed to responsible development and management of its collieries and projects.