Coal production at the Elandspruit mine, in Mpumalanga, is on track to reach 200 000 t/m of run-of-mine (RoM) with the development of the colliery’s underground mining project, says coal mining and trading company Wescoal Holdings CEO Waheed Sulaiman.

The company signed a short-term contract with State-owned power utility Eskom in September 2015 to supply it with coal from Elandspruit. Wescoal currently sells more than 80% of its coal production to Eskom, producing 2.8-million tonnes of coal in the 12 months to March 31.

Elandspruit, which was operationalised at the start of the year, currently produces two- million tons a year of RoM.

Sulaiman avers that Elandspruit can produce more coal, with the company having completed tests that prove the mine can produce more than 200 000 t/m of RoM.

The mine achieved an output of 50 000 t of RoM in its first month of production (July 2015) and, by October 2015, had reached its nameplate production capacity of 165 000 t/m. The Elandspruit colliery has a life-of-mine (LoM) of 12 to 15 years and 34-million tons in coal resources.

“Elandspruit is a really good resource and lends itself to increased production without too many challenges,” Sulaiman points out.

The colliery is Wescoal’s flagship project and, having completed its feasibility phase only in October 2014, it started selling coal to Eskom in September 2015.

Wescoal project manager Ettienne Strydom says there are several power stations around Elandspruit.

Coal is transported for processing from Elandspruit to the mine’s plant 19 km away, after which 125 000 t of coal is delivered to Eskom for distribution to its power stations.

Some of the coal produced is exported or sold in the local market for use in heating systems and heavy industry.

Sulaiman points out that Elandspruit has been operating smoothly, with no major safety issues or challenges in terms of ramping up the colliery’s production.

“It’s been a really good project. We commissioned Elandspruit with no long-term debt, as it’s completely internally funded, which is exceptional, given the current challenging mining environment.”

The total capital cost of the colliery is around R200-million, including infrastructure and the processing plant, Sulaiman says.

In November 2015, Wescoal raised a further R50-million to upgrade the project’s existing infrastructure and some of the surrounding roads and water infrastructure.

“We have also used some of that money to debottleneck our processing plant and to derisk some activities at the Elandspruit mine,” Sulaiman points out.

Strydom adds that retaining the value discovered at Elandspruit during the planning stages was a challenge. There is a risk of mining less-valuable coal at a multiseam colliery, such as Elandspruit, which would decrease the total value of the mine. Thus, a lot of work had to be done to understand the geology of the area before mining could start.

Other Mines in Portfolio
Wescoal GM Bonani Siko says Intibane is set to grow, as a further 2.2-million tons of coal is available at Intibane 2, a new mining area connected to the existing Intibane mine.

Wescoal’s third colliery, Khanyisa, also in Mpumalanga, has been placed under care and maintenance before it is expanded. Siko explains that the Khanyisa opencast mine is almost depleted, but two new opportunities have expanded its LoM to five years. Combined with its underground and opencast mining operations, Khanyisa has more than four-millions tons of coal available.

Strydom explains that Wescoal has been trying to build up a consistent production profile for its collieries for the past three to five years, adding that Elandspruit helped to achieve this goal by providing a long-term source of coal.

Wescoal has been working to improve its broad-based black economic-empowerment rating in accordance with Eskom’s coal supplier requirements. Wescoal is currently 40% black-owned, an increase on the 30% as at June 2015.

“This is how we are going to . . . progress. As Wescoal moves forward, we want to empower not only our shareholders but also our suppliers,” Sulaiman concludes.