JSE-listed Coal of Africa (CoAL) reported on Thursday that its Mooiplaats thermal coal project, in Mpumalanga, was on track to produce saleable export-quality thermal coal early in the company’s new financial year, which would begin on July 1.
CoAL MD Simon Farrell said in a statement that he was also confident that production at the company’s Vele coking coal project, in Limpopo, was likely to start by the end of 2009.
Progress on the underground and surface infrastructure of the Mooiplaats project continued according to schedule, the company stated in its quarterly report for the period ending March.
The incline conveyor belt linking the underground operations to the surface infrastructure had been commissioned, allowing for the transport of coal to the surface stockpile areas. Production, stockpile and auxiliary conveyor belts were completed with the installation and commissioning of the remaining conveyor belts due early in the next quarter.
The road network construction on the project remained on course for completion by the end of April 2009.
The development of the underground infrastructure was delayed owing to the presence of a dyke but, by the end of March, the two continuous miners had progressed over 150 m, yielding 16 900 t of coal, the company stated.
Construction of change houses, offices and workshops has commenced and was expected to be completed by the end of April 2009, when phase one of the wash plant was to be commissioned.
Kwena Processing will operate the wash plant and project management company Portaclone has been appointed to construct the second phase of the plant. The slurry dams will be constructed and operated by mining services ECMP.
CoAL stated that discussions with third parties regarding the use of their coal sidings continued and that finalisation of commercial terms were also expected by the end of April. Negotiations regarding long term off-take agreements for the export of thermal coal, as well as the lean coal produced, were ongoing.
Furthermore, discussions regarding the sale of lower quality thermal coal to State-owned electricity producer Eskom continued.
Regarding its Vele project, CoAL noted that during the March quarter, specialist studies required for the environmental impact assessment and environmental-management plan were completed.
“These specialist studies will be discussed with all interested and affected parties during April 2009, prior to submission to the Department of Minerals and Energy (DME) as part of the new order mining right application, submitted in October 2008. The Company remains hopeful of receiving a granted new order mining right by September of this year.”
The remaining 12 holes of the bulk sample drilling programme were completed in early 2009, allowing for better definition of the proposed bulk sample boxcut site. A full suite of geotechnical analysis as well as an incline drilling programme, started during the quarter.
The analysis to be undertaken includes a 70 hole-drilling programme that will improve the project drilling density and resource modelling, assist in assessing underground mining roof and floor conditions, as well as identify the presence of faulting and the continuity of the select mining horizon.
The incline drilling programme will improve the data on the site identified for the extraction of the 5 000 t bulk sample for analysis by steel producer ArcelorMittal and other potential customers.
Additionally, the tender process for the supply of a modular plant was finalised during the March quarter with a letter of intent sent to equipment supplier ELB for the construction of the plant. ELB has partnered with engineering house PBA Projects to design and construct the modular plant, which will be based on PBA’s processing plant designs used in the marine diamond industry.
A memorandum of understanding has been signed with mineral processing firm DRA to design, construct and operate the larger, permanent Vele coking coal wash plant. The modular wash plant will be relocated to the Makhado project once the larger wash plant at Vele has been commissioned.
GRD Minproc has been mandated to complete the project feasibility study on the Vele project, the results of which were expected by August 2009. This study will include both the underground and opencast sections of the project.
Agreements with surface rights owners have been finalised, allowing for the development of the required infrastructure and bulk sample box-cut once legislative approval for the sample has been granted.
CoAL has also appointed the preferred partner to conduct opencast mining operations at the Vele coking coal project, and the formalisation of the agreements with the partner was expected to be finalised by the end of the June 2009 quarter.
During the quarter under review, CoAL also reached an agreement with State-owned Transent Freight Rail (TFR) for the rail allocation of one-million tons a year to the Matola terminal, in Mozambique. This rail allocation matches the CoAL’s port allocation of one-million tons a year through the Matola Terminal, secured through an agreement with Terminal De Carvao Da Matola Limitada.
During the March quarter, CoAL successfully railed over 38 000 t of third-party coal to the Matola terminal. Of the coal railed, over 22 000 t were shipped from th terminal during the period, ensuring the viability of the rail and port allocation while at the same time generating income from the allocation.
CoAL stated that TFR announced during the quarter that a record of 50 000 t railed in one week through the Maputo corridor, further evidence of the practical viability of this export route as an alternative to the Richards Bay coal terminal.
During the quarter the company also secured the rights to up to 100% of any increased capacity at the Matola terminal in return for contributing loan funding.
CoAL agreed to loan the required funds for the proposed two-million tons a year expansion at the Matola terminal which will increase its export allocation at the port to three-million tons a year. The increased port capacity was expected to be effective from August 2010 and discussions with TFR to secure an additional two-million tons a year rail capacity were ongoing.
Source: Mining Weekly
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