JOHANNESBURG (miningweekly.com) – The directive of the Department of Environmental Affairs (DEA) to halt mining at the Vele colliery has left Coal of Africa Limited (CoAL) "with no choice" but to reduce its workforce by 596 people, CoAL CEO John Wallington said on Wednesday.

CoAL's plans involve mining and rehabilitation taking place concurrently at the Vele opencast coal project, where the DEA ordered operations to cease on August 11. CoAL has since applied for the suspension of the compliance notice.

The incipient opencast mine, which is 15 km from the border of the Mapungubwe National Park - a Unesco World Heritage site, will be rehabilitated before the underground mine reaches a point 6 km from the park's border.

"The importance of the mine has only manifested once it was closed," Wallington told Mining Weekly Online, as angry union workers, protesting job losses, marched on the mine, which is one of the region's few job-creating economic developments in 20 years.

Some 200 people were continuing to be employed at the mine, many in a security capacity.

CoAL has plans to produce five million tons of soft coking coal from Vele for 25 years, and another five million tons of hard coking coal a year for 20 years from its Makhado project, also in Limpopo province.

Wallington said that CoAL's negotiations with the DEA were progressing well. The Department of Water Affairs (DWA) must also still approve Vele's integrated water use licence application (Iwula).

CoAL said that it was in the process of submitting rectification applications in terms of section 24G of the South African National Environmental Management Amendment Act, or Nema, in order to be able to continue as a fully compliant miner.

It had also complied with a DWA directive requesting a cessation of related specific activities pending the issuing of the Iwula.

An independent environmental-assessment practitioner had been appointed to assess the risks to the water resource of current and proposed mining activities.

While Wallington remained confident that the DEA and DWA processes would be satisfactorily addressed, he said that the timelines required to complete those processes had "unfortunately left the company with no choice" but to reduce Vele's workforce by 596 people.

He anticipated that production would recommence in the last quarter of 2010.

"Personally, my view is that Vele will not scar Mapungubwe at all. Vele mine is going to be run with extremely tight compliance. Right now, we're intensively involved with the DEA, reinforcing everything that we are going to do.

"Those discussions are going very well and I believe that we'll develop a very good relationship with the DEA and I'm very pleased about that," Wallington added.