The coal mining industry in South Africa has experienced substantial developments over the last two decades, particularly in Mpumalanga, which boasts some of the largest coalfields in Southern Africa.
There are many exciting projects under way in South Africa’s long-time coal basin, such as ASX- and Aim-listed thermal coal mining company Continental Coal’s Penumbra project.
In May, the company’s 74%-owned local subsidiary, Continental Coal South Africa (SA), completed the acquisition of the outstanding minority interests in coal mining junior Mashala Resources, which gives Continental Coal SA a 100% interest in the Ferreira and Penumbra coal mines, besides others.
These two mines produce a high-quality thermal coal product that is exported through the Richards Bay Coal Terminal (RBCT) and sold under existing offtake agreements, mainly to the Asian markets.
Penumbra has an estimated gross saleable reserve of 5.4-million tons and a gross on-site coal reserve of about 68.3-million tons. Completion costs for the project, which began in September 2011 and were about 95% complete by the end of March 2013, are estimated at $40-million.
The mine was also set to achieve yearly export coal sales of 500 000 t in June. Exports at these levels are expected to continue over an initial ten-year mine life, generating between $15-million and $20-million in cash flow, based on current export coal prices.
The project is being developed as a conventional underground bord-and-pillar mining operation and contains two mechanised coal-production sections, each with a continuous miner. Additionally, one section is equipped with three shuttle cars, which are better suited to midseam mining heights, while the other section is equipped with battery haulers, which are better suited to low-seam mining heights.
The second Joy 14HM15 continuous miner was commissioned at the end of February. This and the development of more pitrooms in the bord-and-pillar underground operations have resulted in steady production increases over the quarter ending March 31, 2013. Total mined material (coal and sandstone) amounted to 14 031 t in January, 27 311 t in February and 30 867 t by the end of March.
Penumbra has increased run-of-mine (RoM) coal production by 99% in the quarter. RoM coal production increased from 691 t to 52 876 t during this quarter.
The yearly RoM production for Penumbra is forecast to ramp up to 750 000 t.
Penumbra is ramping up towards full production, having nearly completed all outstanding underground services needed for mining operations. Late in the quarter, the successful installation of the first main trunk conveyor was completed.
The focus during the quarter was on geo-technical work pertaining to the support of the sandstone roof above the coal seam, particularly the amount of support needed. Issues concerning this support impacted on Penumbra’s planned accelerated build-up to full production – hence, the strong focus during this period.
The focus for the current quarter at Penumbra has shifted to monitoring methane below the overlying wetlands.
Electrical engineering and consulting firm ENI completed 95% of all electrical installations at the end of the last quarter and had planned to complete this work by the end of May, at which time the instrumentation installation should also have been completed.
Further, environmental products, services and solutions provider Enbitec completed the water purification, sewerage and pretreatment plants.
Geotechnical specialist Geopractica completed the pre-cementation holes around the main ventilation shaft collar. Piling of the shaft collar to competent rock was also completed during the quarter. Construction of the shaft collar civil work began at the beginning of the current quarter.
The total production costs of the project at the end of March exceeded R22.98-billion. Gross profit at the end of the same period was R548 000.
Currently, Penumbra has exported 23 199 t of coal – the mine’s total sales for this financial year.
Revenue for the mine so far is, therefore, exclusively from export sales and amounts to R23.5-million.
All coal produced is beneficiated at the Delta processing operation, which also beneficiates Continental Coal’s Ferreira operation.
The Delta processing operation comprises a 1.8-million-ton-a-year coal processing plant and the 1.2-million-ton-a-year Anthra rail siding on the coal line to the RBCT, in KwaZulu-Natal. Meanwhile, Continental Coal South Africa currently holds a 100% interest in the De Witte- krans coal project, in Mpuma-langa, which is to be developed as the company’s fourth thermal coal mining operation in 2013. Continental Coal is advancing offtake agreements and financing, and strategic partnership discussions ahead of the project’s initial openpit development. Optimisation work completed on the feasibility study in the December quarter identified the opportunity to develop De Wittekrans into a major mining operation to produce 3.6-million tons a year of RoM coal over a 33-year mine life, with yearly sales of up to 2.4-million tons of thermal coal product. The coal miner states that this product will be ideally suited to the South African domestic market and the Asian export market, with yearly sales revenue forecast to reach $145-million.
MPUMALANGA COAL INTEREST Thermal coal mining company Continental Coal South Africa now has a 100% interest in the Penumbra project located in Mpumalanga
