JOHANNESBURG (miningweekly.com) – Triple-listed Coal of Africa Limited (CoAL) will review the development plan for its Makhado project, in Limpopo, which may result in reduced capital expenditure (capex), a lower production rate, a shorter construction period and an extended mine life.
Makhado’s initial development plan included a 26-month construction phase, followed by a four-month ramp-up to a production rate of 5.5-million tonnes a year of coal. The initial capex requirement was estimated at $281-million.
“Despite the proposed lower output, Makhado would still look to deliver positive returns for shareholders. A detailed report on the revised strategy for Makhado is due to be reviewed by CoAL’s board in September,” the company said on Monday.
In a report to shareholders on activities in the three months to June 30, CoAL assured shareholders it remained committed to the sustainable development of the Makhado project.
Meanwhile, its Mooiplaats and Vele collieries remain on care and maintenance.
CoAL still plans to sell the Mooiplaats colliery.
At Vele, it is still awaiting the granting of an integrated water use licence – the final approval required to complete the regulatory approvals process for the stream diversion that is necessary for its plant modification project.
During the quarter, CoAL acquired the Uitkomst colliery, which it believes will provide immediate cash flow to support the company while it develops the Makhado project.
Further, the company is also reviewing prospects for another cash generative asset to help it become self-sufficient.