Construction of the new Phola coal processing plant has begun in Mpumalanga.

Mining giants BHP Billiton and Anglo American are joint 50:50 partners in the plant, which is expected to be completed in the second half of 2009.

Anglo Coal will build Phola, which is located on BHP Billiton property.

The 16-million-ton-a-year plant will process eight million tons a year for each partner.

DRA of Johannesburg had been contracted to construct the main plant and Roymec the materials handling segment, BHP Billiton media spokesperson Illtud Harri said.

Phola will replace the Rietspruit coal plant, which is 32 km from the Klipspruit opencast mine. Several options for Rietspruit's future were being investigated, Harri added.

As Phola adjoins Klipspruit, the need for raw coal to be road hauled to Rietspruit is eliminated.

Expanding Klipspruit's capacity to eight million tons a year from the current 4,8-million tons, as well as pay for its share of Phola, will cost BHP Billiton $450-million.

The 20-year mine will export half of its output.

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