 The coal arm of BHP Billiton, BHP Billiton Energy Coal South Africa (Becsa), is spending R11-billion on two large new local coal projects, one of them the biggest single energy coal initiative the global group has ever undertaken.Becsa is investing R7,5-billion ($975- million) in the Douglas Middelburg Optimisation (DMO) project, which is bigger than anything carried out before as a single project, and R3,5-billion ($450-million) in the Klipspruit project, the processing plant for which is a joint venture with rival Anglo Coal.
Becsa is a primary supplier of coal to three Eskom power stations, Hendrina, Kendal and Duvha.
Underground mining at Douglas will come to an end later this year, allowing the creation of one large DMO opencast operation that combines the reserves of both the Douglas and Middelburg collieries.
Construction companies are mobilised on the DMO site, civil work is under way and the establishment of a new mining area has begun, Becsa president and COO Wayne Isaacs tells Mining Weekly.
Preapproval allowed the Klipspruit coal-processing plant to emerge from its starting blocks early. Foundations have been laid and steel erection is thus under way for the Klipspruit processing plant, which Becsa is building in joint venture with Anglo Coal.
The DMO also involves the construction of large processing plants, which have still to be equipped internally with the usual screens and cyclones, and externally with rail load-outs, bins and associated equipment.
Becsa has made great strides in the last year to restructure and become the operator of three tier-one assets - DMO, Klipspruit and Khutala - tier-one assets being long life and low cost.
When the projects are completed, there will be three strong tier-one assets on which to build the base for future projects.
BLACK ECONOMIC EMPOWERMENT
BHP Billiton last year reached closure on the sale of Koornfontein coal mine, together with 1,5- million tons a year of Richards Bay Coal Terminal entitlement to an entity controlled by a black economic-empowerment (BEE) consortium.
Economic benefit of the mine passed on July 1, 2006, being the value date, with deal closure being effective July 1, 2007. The BEE consortium, which holds 50% plus one share in the new entity, is led by Siyanda Resources and AKA Resources Holdings, and includes various broad-based groups as well as a Koornfontein employee trust.
Coronation Capital and Investec Bank together hold 50% less one share in the new entity.
In addition to a cash consideration for the transaction, BHP Billiton received further compensation for potential future Eskom coal sales.
The aggregate consideration in current money terms is R430-million ($60-million). BHP Billiton provided R70-million ($10-million) in vendor finance for the BEE consortium.
This transaction formed an integral part of BHP Billiton's BEE strategy, involving the sale of operating entities to BEE-controlled entities. The strategy started with the Eyesizwe, now Exxaro, assets, followed up by the sale of Delmas, now Koornfontein, and culminated in the sale of Optimum (See page 11).
Becsa has earned BEE credits for the Koorn-fontein sale and will also do so for the sale of Optimum to a BEE company. Becsa is also striving for level-four status on the broad-based black economic-empowerment scorecard, which would win it a 100% BEE credit.
It procures 20% of its goods and services from BEE companies and has created a group that is working to improve transformation performance.
It operates an adult basic education programme, is developing artisan skills and has a bursary programme.
It runs mathematics and science classes, has helped to fund the building of a greenhouse at Optimum colliery to develop business opportunities, and partnered Anglo in providing potable water for the Witbank local authority.
Its total yearly expenditure on corporate social development exceeds R4-million.
ENHANCING SAFETY
The new projects under way are providing opportunities to make the operation safer and more energy efficient.
"We are really trying to get out on the front foot to make things safer," says Isaacs.
"I would like to be able to sit here today and say that we have completely eliminated [accidents] from our business, but I can't say that today. But what I can say is that we are putting a lot of focus on things like our fatal risk control protocols, which we continue to roll out.
"We have made huge strides in improving our safety in our light-duty vehicles. If you look at our roll-over protection that we have introduced to the fleet, it is very significant. It is one of those never-ending issues on which we have to maintain focus and we need to drive safety as a value, not as a priority.
"Priorities change from time to time but values don't. No matter what happens with the business, no matter if it has rained or you need coal produced or something else has happened in the operation, at the end of the day, your safety value is always going to see that you do things in a safe manner to prevent you and your coworkers from being injured," he says.
Greater energy efficiency is a consideration in all new purchases. Capacitors have been installed at many mines to correct the power factor and limit energy demand; more efficient electric motors have been installed and electric drilling equipment has been replaced by diesel drilling equipment. The company has installed lower-energy light bulbs and is also running an energy efficiency programme to help employees understand what they can do at home to save electricity.
Becsa has a project pipeline that has the potential to offer several billion tons of new project resources, including possible future projects in areas like Leandra and Naude's Bank.
A fleet of new mining trucks and loading equipment will be bought for the Klipspruit mine, the existing dragline for which is to be refurbished.
|
|
