PERTH (miningweekly.com) – Africa-focused coal-miner Riversdale Mining reported on Friday that its coal sales had increased by 70 436 t to 388 519 t during the half-year to December 31, 2009. However, lower output and yields at one of its South African operations, knocked its earnings.
It said the improvement in sales reflected a recovery in the anthracite market. “Market conditions have continued to improve as customers expand their production levels from previous lows and prices realised for both domestic and export sales have increased towards the end of the first half,” the ASX-listed company said in a note to shareholders.
Nevertheless, during the interim period, Riversdale reported a net loss of A$4,2-million, compared with a profit of A$80 000 in the corresponding period of 2008.
The company said that the loss was attributable to lower interest income, lower coal production and higher mining costs at the Zululand Anthracite Colliery (ZAC), in South Africa, where operating profit before income tax and minority interests in the current half year was A$4,0-million, compared with A$9,6-million in 2008.
The company reported that run-of-mine (ROM) production at the ZAC declined by around 35 758 t, to 396 770 t, compared with the corresponding period in the previous year.
The stage 1 developments at the Benga coal project, in Mozambique, had also been approved during the period, with Riversdale and its joint-venture partner, Tata Steel, sanctioning a capital budget of $270-million, excluding working capital.
The development decision was based on the Benga feasibility study, which was completed during July, which proposed a three-stage development model, to align with the completion and subsequent expansion of rail and port infrastructure in Mozambique and the commencement of river barging.
The initial Stage 1 development at 5,3-million ton a year ROM will produce about 1,7-million tons a year of high quality hard coking coal and 0,3-million tons a year of export thermal coal. Initial coal exports are anticipated in the second half of 2011.
Riversdale said that a Stage 2 expansion by 2014, will include the installation of a second module of the coal handling and preparation plant and is anticipated to increase ROM production to 10,6-million tons a year, to produce 3,3-million tons a year high-quality hard coking coal and two-million tons a year of export thermal coal.
The final stage is anticipated to increase coal production to about 20-million tons a year through installation of two additional coal preparation plant modules. The decision on the timing of the Stage 3 expansion will depend, among other things, on future coal market conditions and the availability of port, rail and barging capacity at that time.
The coal miner added that a series of studies on the Zambezi river have now also been completed to confirm the viability of large-scale barging of coal to an offshore floating transloading vessel.
It is anticipated that a barging feasibility study will be submitted to the government of Mozambique along with a river environmental impact study (EIS) during the second half of 2010.
“Riversdale has found no physical impediments to coal barging on the Zambezi river, although some dredging may be required on certain sections of the river.”
However, the company added that the implementation of large-scale barging would depend on the completion and approval of an EIS and environmental management plan, as well as licensing by Mozambique statutory authorities for barging and trans-loading operations over the 560 km from Tete to Chinde at the river mouth.
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