Source: Mining Weekly
Australian coal development company Coal of Africa Limited (CoAL) has started additional production-related drilling, as well as drilling to identify the site for the second decline shaft, on the farms neighbouring the company’s Mooiplaats coal project, in South Africa’s Mpumalanga province.
The ASX-, Aim- and JSE-listed company started the additional drilling on the farms Klipbank and Adrianople, and stated that it was also exploring on other adjacent farms to allow for further expansion of the Mooiplaats thermal coal project, which produced its first run-of-mine in October.
Reporting on the mine-development progress, CoAL said on Wednesday that the development of the project’s underground mining portals was at an “advanced stage”, and that production from these would start by the end of the March quarter.
The company reported that the surface infrastructure establishment was also progressing according to plan and the first wash-plant modules were scheduled for commissioning during the March quarter.
The development of the box-cut and surface infrastructure continued, enabling the contractors to sink to coal and concrete the mine floor.
“Stabilisation of the decline ramp floor and side walls is complete and over 150 m of the incline conveyor belt structure has been installed, with commissioning due in the March quarter,” the company stated.
The first coal sales from this project were expected in the June quarter, by when the miner also hoped to have concluded discussions with local power producer Eskom, on the sale of lower-quality coal.
CoAL was still in discussions on long-term offtake agreements for the export coal, but has already secured port and rail allocation, guaranteeing its ability to transport and export its mined product.
At its 74%-owned Vele coking coal project, located in the Limpopo province, CoAL stated that exploration has resulted in a resource upgrade from 441-million tons to 721-million tons of gross in-situ opencastable resource.
Drilling on the three bulk sample drill sites at Vele has been completed and the washability tests on the core samples finalised, with further detailed analysis under way.
CoAL stated that large diameter drill (LDD) cores have been submitted for detailed laboratory analysis and initial results indicated a significant improvement in both coking coal qualities and yield, when compared with historical results.
Indications were that the resource contained prime coking coal with phosphorous levels below 0,01%, rather than the semisoft coking coal as previously reported.
In its interim results, CoAL stated that detailed studies have been undertaken and the new order mining right application, as well as the environmental scoping report have been submitted. Specialist studies for the environmental-impact assessment and environmental-management plan were almost completed and were due for submission in early 2009.
The company also submitted an application to the Department of Minerals and Energy (DME) to amend the project’s new order prospecting right to facilitate the extraction of a bulk sample of 5 000 t of coal from a box-cut for extensive testing and analysis by steel producer ArcelorMittal.
The company added that during November, the preliminary Vele project mine production schedule was revised to include both underground and opencast sections. The revised schedule would potentially deliver significantly improved coking coal yields with substantially reduced mining costs and an extended mine life to beyond 2040.
The current drilling programme would also better define the site of the proposed bulk sample box-cut with the remaining 12 holes due to be completed early in 2009. This work, over and above improving the drilling density and resource modelling, would assist in assessing the roof stability, presence of faulting and continuity of the select mining horizon.
Exploration drilling totaling over 3 400 m was completed on CoAL’s Makhado project, also in Limpopo, during the six months under review, resulting in the design and commencement of two LDD programmes. The first LDD programme comprised 40 holes and yielded bulk samples for detailed coking coal analysis, while the second 20-hole LDD programme focused on three sites. By the end of December 2008, 12 holes had been completed.
Results of core analysed by laboratories yielded good quality hard coking coal and full results of this programme were expected in the June quarter.
The mining rights application for the Makhado project was almost complete and significant progress was being made on the environmental studies, which would be submitted to the DME once the Section 11 approval had been received for the farm-swap agreement with diversified giant Rio Tinto.
CoAL and Rio Tinto entered into a joint venture and farm-swap agreement relating to the prospecting rights forming part of Rio Tinto`s Chapudi and CoAL’s Makhado project. The rationalisation of the prospecting rights held by CoAL and Chapudi provided significant benefits to both companies in terms of improving economics and bringing the projects into commercial production. The hard-coking coal Makhado project has a resource of 1,335-billion gross insitu tons.
“Despite tough global conditions, CoAL continues to have a low cost base and is well positioned to develop its current projects, as well as being able to take advantage of potential future prospects that may arise.”
For the six months ended December 31, CoAL reported a net loss of A$1,3-million, compared with the A$2,2-million loss recorded in the corresponding period of 2007. Headline loss a share narrowed to 0,32c, compared with the 0,75c recorded in 2007.
At the end of December, CoAL had a cash balance of A$204-million, and no debt, ensuring that the company had sufficient resources for the exploration and development of its projects.
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