Madondo said that drilling results in an Mpumalanga coalfield were expected before the end of December and steps were simultaneously being taken to secure State-held uranium rights in the Northern Cape.
He said the pursuit of coal stemmed from the State-owned Central Energy Fund (CEF) – of which AEMFC was part – inheriting coal mineral rights from the previous government, and the pursuit of uranium a consequence of the South African government declaring uranium a national strategic resource.
If drilling results firmed up a coal resource and reserve, AEMFC would proceed with a bankable feasibility study into the building of a coal-mine.
“We are in the process of doing everything ahead of basically going into mining,” Madondo told Mining Weekly Online.
He said that AEMFC was exploring for coal in the Oogies area around which the CEF, under the previous government, used to store strategic crude oil stocks on behalf of the State.
To buffer the strategic stocks, the previous government bought up the mineral rights around the containers and these were the rights that had now been integrated within AEMFC.
“We are also in the process of trying to get uranium rights in the Northern Cape. We have not yet got them, but we are hopeful that we will get them. Discussions are taking place within government to see which is the right State entity to hold those rights,” Madondo added.
On AEMFC’s acquisition policy, he said that, “wherever we see that there are assets that may be obtainable at a good price, we will obviously try to do that”.
“What we are trying to do is to build this company, which is currently part of the CEF,” he said.
Also part of the CEF was the State-owned PetroSA, which was operating on a commercial basis and “we expect to do so as well”.
Asked what the company’s timeframe was for its first coal mine, he said: “Mining takes time, five, six years, unless we have a project that is opencastable.”
He said the company had not yet looked at the Dominion uranium project in Klerksdorp, which Uranium One had put on care-and-maintenance.
“If it is an opportunity, we will have to look at it, but we have not engaged anyone in that respect, because if one looks at the nuclear power station, it is still a long way off,” he said, referring to the decision of the South African government to build more nuclear power stations, in addition to the Koeberg nuclear power plant in the Western Cape.
“We have not looked for uranium prospects aggressively, but obviously on the coal side we are looking for opportunities.
“If there were acquisitions on the coal side, we would be interested to look at those, resources permitting, because our funding comes from the CEF,” Madondo said.
Currently the company was made up of a small five-person team, which included a geologist, and a mining engineer.
The intention was to keep the team small and to make use of subcontractors and consultants.
“We are in the process of drilling and we expect the resource and reserves statement, which will indicate whether we can begin to move forward. We expect that towards the end of December. We have used external mining firms. We send the drilling samples to the laboratories.
“We will have to take the project to bankable stage and, once we have reached that point, we will go to the market to seek funding,” he said.