Despite the delayed turn- around times of coal washing results for the Ncondezi coal project’s defini- tive feasibility study (DFS), the $376-million project, owned by exploration and development company Ncondezi Coal, in Tete, Mozambique, remains within budget and on schedule to be completed by the third quarter of next year.

Ncondezi corporate development manager Hanno Pengilly tells Mining Weekly that an additional two accredited laboratories in South Africa, namely Act and Inspectorate M&L, were appointed to alleviate the workload on ALS Coal Laboratory, in Witbank, to prevent any material delay of the DFS.

He says Ncondezi will be in a position to assess the effect of the delays when it has received the complete set of coal washing results from the accredited labs.

As of November 18, Ncondezi had received about 95% of the 4 700 samples sent for coal wash tests and is targeting to have the full set of results completed by the end of November.

“With these results in hand, Ncondezi will be able to provide further guidance on the completion of the updated resource model and related project updates.

“Once the updated resource model has been completed, Ncondezi will evaluate the project licence areas with the greatest potential for metallurgical coal,” he states.

Subject to the size of the metallurgical coal potential, a large-diameter drill programme will be initiated to better iden- tify the metallurgical coal qualities. Ncondezi expects an update in the first quarter of next year.

“Despite the delays in lab turnaround times, Ncondezi, still plans on presenting a resource update for at least three of the six coal blocks identified in the project area before year-end. The remaining coal blocks are expected to be updated by February next year. This will be a major milestone in the DFS programme, as it will provide greater under- standing and confidence in the project,” Pengilly points out.

The drilling for the DFS was completed in August, while total drilling during the 2011 drill programme included 170 HQ-diameter boreholes that totalled 25 106 m of drilling, and 62 pitch circle diameter (PCD) boreholes that totalled 10 744 m of drilling.

The total drilling since August last year, when the DFS work programme began, amounts to 306 boreholes, including 194 HQ-diameter boreholes and 112 PCD boreholes that represent more than 52 000 m of drilling.

“As part of the ongoing DFS, additional geotechnical drilling and further resource classification drilling are being undertaken with two core rigs,” Pengilly says.

Further, HQ-diameter boreholes from the drilling programme that showed attractive swells, rogas and yield parameters will be sent for further metal- lurgical coal tests to assess the potential for metallurgical coal.

However, Pengilly notes that it is too early to comment on these results.

As part of the DFS drill programme, Ncondezi drilled on a wide-space grid of 4 km across the 38 700 ha licence area. This grid was narrowed as the com- pany honed in on the most prospective areas, with drill grid spacing down to 350 m in these areas.

“Given the size of the area covered, we are happy with the amount of work completed in the short timeframe.

“In terms of the time schedule, we are over 50% complete and continue to make steady pro- gress towards completion in mid-2012,” Pengilly assures.

Another challenge facing the project is the rapid rise in exploration and mining activity in Tete, which has resulted in the demand for related equipment, parts and supplies increasing exponentially.

Pengilly says Ncondezi has put a logistics team in place to keep potential problems in securing the necessary equipment to a minimum.

“However, this has become less of an issue, as transportation into the region has become more efficient and regular, while numerous new suppliers and service providers have been setting up offices in Tete.”

Further, the company reported in November that it was in discussions with the Mozambique Ministry of Mineral Resources to sign a framework agreement on which key principles for the mining contract could be agreed.

“The company will begin mining contract negotiations closer to completion of the DFS; however, the signing of a framework agreement will provide early guidelines,” Ncondezi said.
More about the Project

Project house TWP was appointed to undertake the DFS.

TWP Projects coal portfolio manager Brad Rip says the geo- logical models for the various potential mining areas are being produced and the mine designs of these pits are well under way.

However, he adds that the mine design must account for the multiple seams that hold various coal horizons that must be selectively mined to optimise the production profile.

The project has a total Joint Ore Reserves Committee-compliant resource of 1.8-billion tons.

A scoping study that was completed in April last year, identified the economic viability of an openpit thermal coal mine, with production resources of up to ten-million tons a year of export thermal coal.

The operation has an esti- mated 37-year life-of-mine and is expected to start production by the end of 2014 or early 2015.

Railway and Port Construction

In November, Mining Weekly reported that Ncondezi Coal had announced that it was in dis- cussions with joint venture (JV) partners of the Mozambique Coal Industry Export Initiative (MCIEI) to explore the possibility of constructing a greenfield rail line from the developing coal-producing Tete province, in Mozambique, to a new port.

The JV partners, which include miners Rio Tinto and Minas de Revuboe, completed an order-of-magnitude study in September and would meet again to discuss the next steps and to progress the infrastructure initiative.

Ncondezi Coal said the JV is seeking to build additional support for the initiative, while securing near-term capacity from existing export corridors.

The new port would be capable of handling Cape-sized vessels with an initial 25-million-ton-a-year capacity, but it could be expanded to 100-million tons a year.

The company said that results from the MCIEI infrastructure order-of-magnitude study, completed in September, demon- strated that the new railway line and port provided a scalable, cost-effective, reliable and environmentally sound solution for the long-term transport of coal from Tete.

However, in the medium term, before the greenfield railway and port are planned and completed, the company would need to seek access at one of three existing transport corridors for its initial export coal production.

The first option, the Sena railroad to the port of Beira, began exporting coal in September and has a second-phase expansion planned for 2015, which includes the construction of a new coal terminal and an increase in capacity to between 12-million tons and 25-million tons a year.

The second, the upgrade of the Nacala railway line and port, has been commissioned, with diversified miner Vale SA agreeing to take, or pay for, a portion of the planned 30- million-ton-a-year-capacity project. The upgraded Nacala railway line and port are expected to transport coal in the second half of 2014.

Ncondezi said in a statement that the third option, barging coal down the Zambezi river to Chinde, was still a preferred medium-term option for Rio Tinto, with a planned total capacity of more than 20-million tons a year.

The company is in early negotiations with concessionaires for all three export options.

Meanwhile, the company has been completing initial testwork on the viability of using the Ncondezi project’s middlings product, a by-product of export thermal coal production, and nonexport-grade coal in power generation and coal gasification projects.

The company said that initial results on samples had been encouraging.

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