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UPDATE 1-Coal of Africa shares jump after environment deal

JOHANNESBURG, Nov 12 (Reuters) - Shares in Coal of Africa Ltd jumped on Friday after the company reached an agreement with a provincial government over environmental issues which had threatened its Mooiplaats mine with closure. Shares in the South African company, which slumped nearly 16 percent last week on the threat to Mooiplaats, were trading 15.7 percent higher at 9.07 rand by 0830 GMT, outperforming a 1 percent fall in the All-share index. In a statement issued late on Thursday, Coal of Africa said it had reached an agreement with the Mpumalanga provincial government following which a compliance notice would not be issued for the company to cease operations at Mooiplaats. The nature of the environmental issues has not been revealed. But analysts said environmental concerns over the company's mines in South Africa are likely to continue to affect its operations. "Although this seems like a good outcome on the day, in reality all this noise has not helped them," Sasha Naryshkine, an analyst at Vestact in Johannesburg, said. "If you are getting your stuff from Mooiplaats and you are worried about getting the supply, you would have gone and made alternative plans." Coal of Africa, whose shares have fallen about 18 percent since Aug. 1, halted some construction activities at its Vele Colliery in South Africa in August this year after a government order, which said they contravened environmental laws. The company has said it expects to resolve the environmental concerns at Vele before the end of the year, thereby allowing it to proceed with construction. (Reporting by Olivia Kumwenda; Editing by David Holmes) (For more Africa cover visit: http://af.reuters.com -- To comment on this story email: SouthAfrica.Newsroom@reuters.com) (olivia.kumwenda@thomsonreuters.com; +27 11 775 3159; Reuters Messaging:olivia.kumwenda.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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