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SA’s newest coal mine to reach full production by June
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8th March 2013
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South Africa’s newest coal mine Penumbra Coal is planning to ramp up to full production by the second quarter of this year.

Junior miner Continental Coal, owner of Penumbra Coal, invited delegates of this year’s Investing in African Mining Indaba to attend a site visit to the coal mine, which is situated just south of Ermelo, in Mpumalanga. Mining Weekly was one of the attendees.

“We are excited about this project and the Indaba was the perfect opportunity to show-case our achievements to global players in the mining industry,” said Continental Coal CEO Don Turvey.

“As a junior miner, we are proud of what we have been able to achieve at Penumbra and we wanted to share this with the industry,” he added.

The Penumbra coal mine has estimated gross saleable reserves of 5.4-million tons and gross on site coal resources of about 68.3-million tons.

“We began construction at Penumbra in September 2011. After we had received our integrated water use licence (IWUL), we began the shaft decline in February 2012 and entered the first coal seam in mid-November. The first time we actually cut the coal with our new continuous miner was mid-December,” he said.

Turvey explained that there was still some construction to complete on the surface and a significant amount of work was still to be done underground, including establishing substations and mining towards the ventilation shaft, which would be completed in the next quarter.

He added that the company had already received IWULs for all its sites, including its plants.

Currently, Penumbra produces about 15 000 t/m. Turvey added that the company hoped to bring a second continuous miner into a new section of the mine into production by the end of February.

At full production, the mine will produce 750 000 t/y and 500 000 t/y of export-quality coal.

“We hope to operate at full production rate by June,” he noted.

The Penumbra mine is a conventional underground thermal coal board-and-pillar mining operation, with a box-cut excavated to a depth of 18 m and twin declines of 374 m in length. The company is mining a single coal seam at a depth of 50 m to 115 m.

“We will have two fully mechanised production sections, each with a continuous miner,” said Turvey.

He told Mining Weekly that Penumbra has an estimated capital development cost of $40-million.

Expected life-of-mine (LoM) for Penumbra is ten years, but Turvey noted there were oppor- tunities for LoM extension.

“We expect to mine at Penumbra for at least 15 years,” he stated.

Coal produced from the mine is trans-ported 3 km by truck to the company’s Delta coal processing plant, where it is processed and batch washed.

Turvey says the company does batch wash-ing as not all coal reacts the same way to processing.

“The coal from Penumbra is a good quality coal, with a yield of more than 65%, which means that it is mainly used for the export market. From the processing plant it is loaded onto rail trucks at our Anthra siding and transported to Richards Bay,” he said.

The plant was completed in 2009 and cur-rently receives coal from Penumbra and the company’s Ferreira coal mine, which is situated a few kilometres from Penumbra. The spiral section of the plant was completed in April last year.

Turvey noted the project average total mining cost at Penumbra is expected to be R490/t freight on board pricing, with potential net earnings of R290/t.

“Yearly sales revenue for Penumbra is about R385-million,” he added.

Challenges

“We are currently within budget for the Penumbra project. We are, however, slightly overlapping the timeframe, owing to a few challenges during the development phase and further restrictions that were placed on us when we received our IWUL.

“We had to move the position of the shaft, which set us back a few weeks and cost us some money, but we managed to change the mine design and carry on with construction as soon as we could,” said Turvey.

Future Outlook

Going forward, Turvey said the company had plans for all three of its existing coal projects and for potential projects.

“We plan to produce between 1.2-million tons and 1.3-million tons of domestic coal sales from our opencast Vlakvarkfontein coal mine, which is situated 100 km east of Johannesburg. “We also plan to produce about 450 000 t of exports from our openpit Ferreira coal mine,” he said.

The Vlakvarkfontein mine has 14.1-million tons of gross saleable reserves and 17.4-million tons of gross in situ resources, while Ferreira has 0.8-million tons and 1.3-million tons respectively.

“We also plan to proceed with development on our De Wittekrans coal project in the Ermelo coalfield, 15 km south-east of Hendrina, in Mpumalanga,” he said.

Edited by: Megan Wait

 

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Continental Coal CEO Don Turvey discusses South Africa's newest coal mine. Camerawork: Nicholas Boyd. Editing: Darlene Creamer
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