JOHANNESBURG (miningweekly.com) – Aim-, ASX- and JSE- listed Coal of Africa Limited (CoAL) has successfully commissioned the coal handling and preparation plant (CHPP) at its Mooiplaats colliery, in South  Africa’s Mpumalanga province.

This first module of the CHPP has the capacity to process 110 000 t/m of run-of-mine coal. When processing bituminous coal, it would produce an export quality thermal coal, as well as a lower grade-middling product suitable for the domestic power station market.

"The achieved project schedule of less than nine months is very pleasing, particularly given delays caused by an abnormally wet rainy season,” said CoAL MD Simon Farrell.

"The project has also come in under the original capital expenditure budget.”

Meanwhile, CoAL was considering a revised mining layout and tonnage schedule for the Mooiplaats project, which would result in bituminous coal only becoming available during the first quarter of 2010. This was owing to adverse geological conditions at the project, which called or an extensive reassessment of the mine plan.

"Underground mining continued during this period to develop access through lean coal resources to bituminous coal. Again, the mining contractor and the supporting contractor did excellent work to stabilise the access portals and develop through some very challenging weak roof conditions, as well as two dyke intersections without incurring any serious injuries," Farrell said.

Development through "lean" coal areas would now continue to the first quarter of 2010, which would result in a delay in reaching the bituminous coal.

The company noted that commercial discussions with several international parties regarding the sale of this mid-volatile product were ongoing.

Further, discussions with a number of parties which produced unwashed coal but require coal-processing capacity have also started.

Commercial terms have not been completed, but would be based on a profit sharing arrangement.

The company has also reached, in principle, agreements with two international coal-trading companies for a minimum of 70% of the export thermal coal expected to be produced from Mooiplaats. In both cases, formal agreements were likely to be executed in the coming weeks.

CoAL said that the terms and conditions proposed by the traders were “extremely favourable” and offered significant upside over and above what was considered standard terms within the industry.