Obtala to buy two new timber concessions, announces cash injection plan

Obtala Resources has completed the acquisition of two new timber concessions totalling 35,000 hectares in Mozambique and announced plans to make a $0.3m cash injection for additional capital equipment to increase operational productivity.

The cash injection is expected to drive revenues generated from the concessions and will provide employment and training for the local population.

The acquisition of the concessions, totalling 35,000 hectares, will bring the total forestry area to 314,965 hectares and provide for a 13% increase in its current land holdings.

Chairman Francesco Scolaro said: "We are dedicated to making the timber operations a great success in Mozambique where we have built a highly efficient operational platform over the past few years. The additional land holdings provide security that we can achieve higher production levels.

"In tandem, we are making a capital injection to increase and improve our operational capacity and offer a wider range of timber products to the growing local market."

The firm has also agreed a strategy to divest the forestry division in order to recognise its true value and to grow the business in Mozambique more expeditiously.