As the single biggest sup- plier of coal to both State- owned power utility Eskom and the domestic metallurgical market, diversified miner Exxaro aims to increase its coal production to about 100-million tons a year by 2017, an increase of 50-million tons from its current production level.
Exxaro executive GM for business growth Ernst Venter says that its coal business is, and will remain, the company’s mainstay for the future because it holds a lot of potential and it is one of its core competences.
He says that most of the company’s focus will be directed to increasing the production capabilities in the Waterberg region, in Limpopo province.
“The future of coal export in South Africa 15 years from now lies in the Waterberg region and not in Mpumalanga,” says Venter.
He says the company aims to increase its exports to 12-million tons a year of coal by 2014, from its current total of about five- million tons a year.
“We have long-term plans of 26-million tons a year of coal export potential, but for that to be possible, we need to look at infrastructural constraints in terms of rail,” says Venter.
He says that the company is working with rail operator Transnet Freight Rail (TFR) to upgrade the rail line between the Grootegeluk mine, in Limpopo province, to the Waterberg and the Richards Bay Coal Terminal, in KwaZulu-Natal province.
“This will allow us to increase the capacity. Currently, it is around five-million tons a year of coal and, if you put rolling stock on the line, you can increase capacity to 7,5-million tons a year of coal without spending any capital, but as soon as you go beyond that, you have to start thinking about electrification and spending extra capital. We are talking with TFR about this,” says Venter.
Projects in Progress
“If we look at South Africa going forward, the country still needs to increase its energy capacity to 90 000 MW between the years 2020 and 2025. There is market space, and the Medupi expansion and Grootegeluk West project are positioned to help us capture a portion of that,” says Venter.
The first phase of the Grootegeluk mine expansion project, intended to supply coal to Eskom’s Medupi power station, will produce about 14-million tons a year of coal. The second phase of the project, Grootegeluk West, entails a greenfield expansion of the original mine and will produce an additional 16-million tons a year of coal. It will serve the energy coal market as well as the metallurgical coal market.
Meanwhile, Venter says that the company is looking into expanding the capacity of its Inyanda coal plant, in Mpumalanga province.
“There is a lot of potential at the Inyanda plant as it is close to the market and is ideally suited for both metallurgical export and the sized-coal domestic market. The only constraint is that of reserves. We are trying to see if we can double the reserve base to allow a 15-year life-of-mine. Mine production capacity can increase from 1,5-million tons a year of coal to 1,8-million tons a year,” says Venter.
Also in Mpumalanga province is the Belfast project, which is a greenfield extension of the existing mine within the company’s North Block Complex (NBC).
“We are mining 3,5-million tons a year of coal from a base of one-million tons a year of coal in 2007. This is another potential growth area for Exxaro,” says Venter.
The company is building a beneficiation plant in that region to facilitate the Belfast project, as well as the rest of the NBC coal production cluster.
The Belfast project will be developed in two phases. Phase one will involve the supply of coal to Eskom and phase two will involve the supply of coal to the export market.
“When we activate phase two, part of the project will entail sorting out the logistical issues with TFR and the Richards Bay Coal Terminal allocation,” says Venter.
Outside South Africa, the company has entered into a joint venture with mining giant Anglo Coal over its Moranbah South prime hot coking coal mine, in Queensland, Australia.
The mine will be developed in two phases, with phase one produ- cing between 1,5-million tons to two-million tons of prime hard coking coal and phase two producing between 4,5-million tons and five-million tons of prime hard coking coal. This will be destined for the Asian market.
Venter says that the project is a high-priority focus for Exxaro.
Meanwhile, he says the company’s most valuable market, in which it wants to aggressively maintain and grow its market share, is the metallurgical reductant market.
“The high-value metallurgical reductant market feeds the pyrometallurgical industries in South Africa; this is one of the big focus areas for us in the future and it will be the first thrust of our plans going forward,” says Venter.
“We recently commissioned our sintel char plant at Grootegeluk and believe there is great potential to expand this downstream business for the reductant market”
He adds that the second thrust is to increase the company’s energy coal supply to Eskom and independent power producers (IPPs).
“We believe there is room for the growth of IPPs in South Africa in the future, and we will be facilitating that because we believe that the country needs it and cannot do without it,” says Venter.