COAL of Africa Ltd (CoAL) will complete the final work at its controversial Vele mine near the Mapungubwe heritage site now that the suspension of its water- use licence has been lifted.

CoAL’s share price shot up 22% on the news yesterday , reaching 749c. It closed at 717c

CoAL said Water and Environmental Affairs Minister Edna Molewa lifted the suspension of the integrated water-use licence, pending finalisation of an appeal at the Water Tribunal by nongovernmental organisations against the award of the licence.

"It’s been a long time coming and we are pleased," CoAL CEO John Wallington said yesterday.

"We’ve gone through a hugely rigorous process to get to this point. In my view it looks very defendable. The government wouldn’t have given us the environmental authorisation or lifted the suspension if they didn’t feel they would be able to defend any appeal," he said.

Mining at the nearly completed opencast mine was halted in August last year . The environmentalists did not respond to requests for comment yesterday, but they have said the mine would affect tourism and that the mine had underestimated the amount of water it would use.

"We believe the suspension of the IWUL (integrated water-use licence) acted as a headwind on shares of CoAL over the last few months. We would therefore expect the market to react positively to this news," JP Morgan Cazenove analysts said in a note.

Work could now begin on water-related aspects of the mining project that had been long delayed, Mr Wallington said. He declined to put a final figure on how much the delay had cost.

CoAL would begin pumping out water collected in its open-pit mine as well as finishing work on dams at the project, he said. The mine will deliver coal to the plant in January , ramping up to a million tons a year of coking coal.

Part of the early production will be sent to CoAL’s 16% shareholder ArcelorMittal in SA to test in its steel mills while the rest would be sent to Maputo for export to customers also wanting to evaluate the coal.

Talks are under way with Transnet Freight Rail about allocation on the railway line to Maputo and with this final hurdle cleared, CoAL can now give the utility a definitive date for loading trains, Mr Wallington said.

CoAL has a 3-million ton export allocation at Maputo harbour, enough for output from the first phase at Vele.