JOHANNESBURG (miningweekly.com) - Coal-to-liquids (CTL) producer Sasol is facing the prospect of replacing three of its large old coal mines with three new coal mines.

The three large existing mines earmarked for replacement are the Twistdraai, Brandspruit and Middelbult operations.

Set to replace Twistdraai is the new Thubelisha; Impumulelo will replace Brandspruit; and a mine still to be named will replace Middelbult.

“We have to replace three mines in the next ten years and have good future growth potential at the proposed Mafutha CTL project. From a mining perspective, the outlook is extremely positive,” Sasol Mining MD Hermann Wenhold tells Mining Weekly.

“We are facing the challenge that Twistdraai and Brandspruit will be mined out shortly, and we have to establish Thubelisha and Impumulelo to replace them, and then, between 2015 and 2017, a replacement mine for Middelbult must be built, and this will also be done on a completely new greenfield reserve base,” adds Wenhold.

While these are not growth projects, the operational ramp- up of the new mines coincides with the operational ramping down of the old mines, over a period of years, which presents career opportunities for employees and dovetails with Sasol Mining’s vision of being on a transformational journey that culminates in the doubling of the company’s business footprint by 2020.

The transformational journey includes delivering socioeconomic transformation; promoting growth opportunities for person- nel locally and abroad; “operationalising” its women-based black economic-empowerment (BEE) partner, Ixia Coal; retain-ing talent; and maintaining an uninterrupted coal supply.

Ixia Coal has a 20% shareholding in Sasol Mining. The women’s group, Wipcoal, owns 51% of the shares of Ixia Coal and Sasol Mining the remaining 49%.

Up to now, Sasol Mining’s mandate has been to be an effi- cient supplier of coal to Sasol Synfuels, in Secunda, a moderate exporter of coal and a supplier of energy coal to Sasol’s Infrachem factory, in Sasolburg.

But now the company also has a mandate to grow, by taking part in the proposed Mafutha CTL project, in Limpopo province, seconding personnel to the Sasol group’s international CTLs in China and India, and by establishing a coal-mining operation that is led, owned, managed and operated by women.

Sasol Mining’s executive management structure has been re- aligned to deal with what Wenhold describes as “the business of today and the business of tomorrow”.

The ‘business of today’ team, besides taking the company on its transformational journey, is also having to deal with the tough current economic realities through the implementation of a recovery plan and the ‘business of tomorrow’ team, with the growth opportunities that the Mafutha CTL, Ixia Coal and the inter- national CTLs are presenting.

The recovery plan is a response to low international rand coal prices and a counteraction to the risk of Sasol Mining not being as profitable as it was in the past.

The recovery plan is designed to ensure short-term profitability during extraordinarily difficult times and to enable the company to deliver on its return-on-invested- capital targets for the next two years.

Steps are simultaneously being taken to increase productivity to 2 000 t a continuous miner (CM) for each shift; to lower rand/ton costs; and to mine safely.

Sasol Mining is building capa- city in its new labour complements, following a high turnover in various labour categories, in order to elevate productivity.

“We have had a high turnover of skilled people, although we are pleased to report that many who left in the boom are now returning in the recovery period.

“We are paying huge attention to training and development; we’ve dusted down our performance management system; we’re improving our human-resources processes; and, as a consequence, we are back to low, single figures of staff turnover.

“To communicate effectively, we have a centre that broadcasts company messages on television screens placed throughout the organisation,” Wenhold says.

The company is accelerating a programme of exposing its employees to behaviours that are associated with values-driven leadership and

management is being taken through self-dis- covery courses aimed at positive behaviour change.

THE NEW MINES

The proposed Thubelisha replace- ment mine will have a capacity to produce between 9,5-million tons and 10,5-million tons a year.

In the north-east of the Secunda complex, Thubelisha will supply both the export market and to Sasol Synfuels.

The first portion of the mine is due to come on stream in 2012 and will ramp up to full production over a three-year period.

A 17-km-long overland conveyor will transport coal to the beneficiation plant.

It is a project with a value of some R3,3-billion and the main components are three shafts that are in the process of being sunk, at a capital investment of some R500-millon.

The materials handling component of the mine – the overland conveyor, the bunkers and asso- ciated infrastructure – will require an investment of R850-million and the remaining investment will be on surface infrastructure, including power provision and roadworks.

Construction on Thubelisha, which is being built on a greenfield farm site, began in June.

The proposed Impumulelo replacement mine will be situated at the south-western portion of the Secunda complex and have a 28-km overland conveyor.

Impumulelo, at a depth of about 190 m, will have a capacity to produce 10-million tons a year of coal. The first production from the mine will be needed in 2014 and the entire mine will come into full operation over a four-year period.

The interesting aspect at Impumulelo is that two coal seams may be mined simultaneously, which lifts the capital investment to R5-billion.

The first coal seam of about 3 m is roughly 190 m below the surface and 30 m below the first seam is the second seam.

Should the twin-seam option be taken, a vertical shaft would be sunk to the deepest seam and an incline shaft built under-ground to the lower seam. Coal will be transported through bunkers to the lower seam from where it will be conveyed through an incline to a surface bunker.

The two-seam mine, if approved, would present water- management challenges, for which a sound water-manage- ment strategy is being put in place.

SASOL MINING AND EXXARO

The JSE-listed Exxaro is Sasol Mining’s 51% BEE prospecting partner at the Mafutha CTL project.

Drilling has been taking place on the prospecting site for more than a year and geological models are being drawn up to assist with mine design.

It will be decided at a later date whether Exxaro also partners Sasol Mining at operational level.

“We will be in a position to take a decision at the end of 2012,” Wenhold tells Mining Weekly.

Whether coal-bed methane (CBM) exploitation takes place for the Mafutha CTL is up to Sasol Mining’s associate group company, Sasol Petroleum International (SPI).

CBM is on the Sasol agenda and the Mafutha CTL team is interacting with SPI to consider the role that CBM could play in the sequestration of carbon dioxide.

IGODA COAL

The withdrawal of Exxaro from the Sasol Mining-Exxaro Igoda joint venture has resulted in Sasol Mining considering new opportunities.

One of the alternatives is to introduce a new BEE partner to take the place of Exxaro, but another is to pursue a new course entirely.

“Our current BEE partner is Ixia Coal. We have 20% BEE compliance through the Ixia deal. Once the Mining Charter has been reviewed from the government side, that will also guide us towards the most appropriate course of action.

“We are already compliant to 2009 and we are taking steps to ensure that we will also be 26% compliant in time for the 2014 deadline,” Wenhold reports.

ANGLO COAL

Sasol Mining’s production of some 40-million tons a year of coal is dependent on the requirements of Sasol Synfuels.

Although labour problems lowered Sasol Mining’s coal out- put in the last financial year, Sasol Synfuels also consumed less and less was exported through the Richards Bay Coal Terminal (RBCT), where Sasol Mining has an export entitlement.

“Due to lower synfuels offtake, lower RBCT throughput and making use of coal off our stockpile owing to labour problems, our unit costs rose significantly, but we are confident that we will supply the coal that our customers require and we don’t have plans to buy in more coal than the long- term contracts that are in place,” Wenhold tells Mining Weekly.

Sasol Mining still has 16 years to go on its 20-year contract to buy 5,1-million tons a year of coal from Anglo Coal’s Isibonelo mine.

Sasol Mining’s only current highwall Syferfontein mine is the company’s lowest-cost and most productive mine, and the proposed mine at the Mafutha CTL project is expected to be an opencast rather than an underground mine.

The company’s Mooikraal coal mine at Sasolburg supplies coal for steam raising and power generation at the Infrachem site, with natural gas from Mozambique being used for the production of chemicals.

Coal seam fluctuations at Mooi- kraal are greater than expected, which is lifting operational costs.

TECHNOLOGY

New safety- and health-related technology is being introduced, which has contributed to Sasol Mining being able to work for a full year without a single fatality.

“We’ve introduced a lot of technology, particularly roof-supporting technology. We make use of twin-boom roof bolters at great cost, but it has made things far safer,” he says.

Together with Joy Manu-facturing, the company is also introducing new technology on the CM machines that contain dust and improve health.

New so-called ‘wet-head’ technology is also being used in areas where there are high levels of methane gas and proximity detectors have been developed for trackless equipment like shuttle cars.

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