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Kenya drawing master plan, Thabazimbi mine closure, cutting road-delivered coal

24th July 2015

By: Martin Creamer

Creamer Media Editor

  

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The government of Kenya is hoping to win back the confidence of mining investors through the development of a comprehensive master plan. Read on page 16 of this edition of Mining Weekly of the East African government giving global consultancy firm McKinsey & Co the task of designing a 20-year plan to guide the development of the country’s underrealised resources potential. It comes against the background of investors needing policy consistency in both mineral exploration and exploitation.

Under development is a long-term plan coupled to a new mining law and policy, which government hopes will be in place by September, when the country’s Senate is expected to ratify the Mining Bill, which has already been passed by the lower house. A law enacted in 1940 currently governs mining and government anticipates the reforms will result in mining increasing its contribution to gross domestic product from 1% currently to 10% in the future.

The long anticipated closure of the Thabazimbi iron-ore mine, in Limpopo, is now at hand. Owner Kumba Iron Ore has started a Section 189 consultation closure process with labour unions that will impact on 800 employees and 360 contractors. Read on page 18 of this edition of Mining Weekly of the 80-year-old mine’s closure having been postponed six times over the past 15 years through mine life extension plans. Now, a combination of factors, including the dismally low iron-ore price, has pulled the carpet from under the mine’s ongoing economic viability. Geotechnical complexities have been exacerbated by resource depletion, high operating costs and a slope failure on June 6.

Transporting coal on roads should be a last resort. Overland conveying should be the preferred method of transporting coal, followed by rail. Against this background, it is appropriate that State utility Eskom continues to press ahead with its integrated logistics strategy of prioritising the use of conveyors and rail to reduce the number of trucks that are required to transport coal to power stations. However, read on page 19 of this edition of Mining Weekly of Eskom road logistics head manager Nico Singh noting that there will always be an element of road haulage use for Eskom as it provides flexibility to the company’s supply chain. But he should concede that the current level of 30% on road is far too high. There should also not be the word “about” used when stating that 60% of the more than 120-million tonnes of coal Eskom receives each year is transported by conveyor systems. Actual percentages are imperative.

The remaining 10% by rail is also dwarfed by road, which is unfortunate. Pleasingly, Singh says Eskom intends to increase the percentage of rail transportation significantly over the next five to ten years as part of a road-to-rail migration strategy aimed at reducing road fatalities, diminishing damage and congestion on limited road infrastructure and minimising the negative health impact of coal haulage on towns and communities near coal mining centres. Eskom transports coal by road in Mpumalanga over a road network of some 3 200 km using a fleet of more than 2 000 trucks. Whoever is responsible for that state of events should be called to account. The average distance travelled by these coal transportation trucks is 600 000 km/day and about 124 000 t of coal is moved on South Africa’s roads each day through a network of 30 to 40 haulage routes. That is highly regrettable.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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