DEVELOPING coal miner has completed a new mine plan for its Mooiplaats coal project, which showed it would be able to produce its first export thermal coal by the first quarter of next year at the latest, it said yesterday.
The company has enough cash to develop Mooiplaats and the first phase of its Vele project. This is an advantage for a junior coal miner, as bank and equity financing conditions remain difficult, especially for smaller companies.
It said last month it had discovered more geological faults in the underground resource at Mooiplaats than originally expected and would have to redesign the mine, which would push out the date of first production.
Coal of Africa’s shares in Australia, the primary listing, shed A0,03 yesterday to A1,42, well below last month’s A1,90, before it announced the delay at Mooiplaats.
After redesigning the mine, it said the delay in first production of export thermal coal by about six months — it was originally scheduled to start exporting by the middle of this year — was the only effect of the change. The tonnage schedule and life of the mine would remain as originally planned.
Mooiplaats would produce about 1,7-million tons of run-of- mine or unbeneficiated export- quality coal next year, peaking at 3,4-million tons by 2013, it said.
Mid-volatile lean coal was being produced from the mine at 30000 tons a month, which could be increased to 80000 tons if discussions with interested parties on an offtake agreement were successful.
Mooiplaats is the first of three projects that Coal of Africa plans to bring on stream. The second, Vele, near Mapungubwe, is waiting for environmental approvals, which are being opposed by some local heritage groups.
The company said it would develop Vele in two phases through a modular design.
In the first phase, costing R350m, 1-million tons of coal a year would be produced for sale to ArcelorMittal, which could be doubled at an additional cost of R200m. The second phase, costing R2,65bn, would increase output to 5-million tons a year. Coal of Africa’s agreement with provides for the sale of up to 5-million tons of coal a year.
Coal of Africa said its third project, Makhado, could also be developed in modules, with the first phase costing R500m to produce a million sale able tons .
mathewsc@bdfm.co.za