British Virgin Islands-based Homeland Energy Group, which is waiting for government go-ahead to start mining at its Kendal operation, in South Africa, will debut on the TSX on Wednesday.

The company expects to receive its mining licence for the Kendal mine “in the next couple of months” and hopes to reach steady-state production of 1,8-million tons a year by the third quarter of this year, president and CEO Stephen Coates said in Toronto on Tuesday.

Construction at the mine, in which Homeland Energy owns 74% and local partners hold the balance, has been completed, and the washing, crushing and screening plants would be commissioned later this month, he said.

Homeland Energy Group was created through a merger at last month between Homeland Energy Corporation and Chrysalis Capital Corporation.

The mine is located in South Africa's Mpumalanga province, about 2,5 km north-east of the Kendal power station, which is owned and operated by State-power utility Eskom.

Once production begins, Kendal will supply run-of-mine coal to Eskom, and will also sell beneficiated coal to industrial users in nearby Johannesburg, Coates said.

About 90% of South Africa's power is generated by coal-fired plants, and, while the country wants to diversify towards cleaner technologies, Eskom will clearly require increasing supplies of the carbon fuel as it scrambles to boost generation capacity and mitigate national power shortages.

Homeland Energy has opted for contract mining at Kendal, and will award the initial three-year contract in the next couple of weeks.

The group has interests in several other South African properties, but the jewel in the crown is undoubtedly the Eloff prospect, on the far west of the Witbank coalfield, Coates said.

Kendal has applied to the Department of Minerals and Energy for a mining licence for the Eloff project, and expects to publish a NI 43101-compliant resource calculation by early April.

The company expects to build a large opencast mine, with production of some six-million tons a year, potentially supplying thermal coal to local and export power-generation customers.

Outside South Africa, Homeland Energy is currently in negotiations to buy several prospecting licences in Botswana.

“We anticipate, over the coming two years... through 2008 and 2009...to have a very active exploration and resource delineation process in Botswana,” Coates said.

Further ashore, the firm owns 15% of Australia's Altona Resources, which plans to build a coal-to-liquids plant and power generation facility in South Australia.

The group also holds a 40% stake in Homeland Uranium, a private Canadian company focused on uranium exploration in Niger, but which also has properties in the US.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.