Diversified miner Xstrata is moving towards opencast mining opera- tions that offer better resource recovery at lower cost. As part of this initiative, the company is conducting opti- misation initiatives at its underground operations, says Xstrata Coal South Africa media liaison officer Songezo Zibi.

“Higher electricity prices in South Africa have an impact on coal operations because they significantly increase production costs, [making it necessary for] the company to improve efficiencies across its operations,” he says.

The company’s opencast mining opera- tions use draglines as well as truck-and-shovel fleets to lessen overburdening and recover the coal, while its underground operations use continuous miners and shuttle cars to extract the coal. These are the mining methods that the company tries to improve upon.

Since Xstrata Coal South Africa acquired the Glencore and Duiker assets, which established its business in South Africa in 2002, it has acquired the 50% balance of the Arthur Taylor colliery and the Arthur Taylor opencast mine (Atcom) joint venture from its partner, as well as developing the greenfield Goedgevonden mine which has been commissioned and is currently in the ramp-up phase. Currently, the new Atcom East project, near Emalahleni, in Mpumalanga province, is being executed, with phase one to be completed in early 2011, and phase 2 and the final ramp-up completed in 2013, says Zibi.

The project was previously part of the Douglas Tavistock joint venture between Xstrata Coal South Africa (16%) and BHP Billiton Energy Coal South Africa (84%). The joint venture was dissolved in February 2008 and Xstrata Coal South Africa took ownership of its share of the reserves and mobile equipment in December 2009 in an area con- tiguous to the existing Atcom operations.

The Atcom East project will cost R3,151-billion and will be integrated into the existing Xstrata Coal South Africa Atcom operations and infrastructure. The combined Atcom operations, includ- ing the project, will produce about 5,7- million tons a year of run-of-mine coal, resulting in about 3,1-million tons of thermal coal for both domestic use and export, he explains.

The integrated Atcom complex will produce a high-grade washed steam coal with an energy content of 5 800 kcal/kg to 6 000 kcal/kg net as received for the export market, as well as a 21,5-Mj/kg air-dried product for the domestic power generation market.

“The Atcom East project will play a significant role in the continued growth and development of Xstrata Coal’s South African operations,” says Xstrata Coal CE Peter Freyberg.

The company will buy new mining equipment, upgrade existing coal handling and processing plants and will build new infrastructure to enable its complete integration into the rest of the Atcom opera- tion in 2011. The expansion will create 263 permanent jobs when it is completed in 2013.

Xstrata Coal South Africa is part of Xstrata Coal’s global coal business, which is the largest exporter of thermal coal in the world. The new Atcom East project will significantly boost its production of thermal coal in South Africa, Zibi concludes.