Mining Weekly

ASX-listed coal miner Universal Coal is considering the acquisition of four thermal assets, with an announcement about the acquisition of one of these greenfield assets from an undisclosed mining major expected soon.

“We do not want to expand our operations just for the sake of growth; we aim to become a midtier coal producer, but this ambition will be undertaken in a pragmatic and commercially responsible fashion,” Universal Coal CEO Tony Weber tells Mining Weekly.

He says the company’s focus is on buying sites that will enable low-cost mining and processing operations near existing infrastructure.

“This is crucial to us, as our primary focus is on mining and not infrastructural development,” states Weber.

Additionally, Universal bought the New Clydesdale colliery (NCC) from coal major Exxaro for an undisclosed sum in February 2014.

NCC is adjacent to Universal Coal’s Roodekop deposit, near Emalahleni, in Mpumalanga, on which Universal is also conducting a feasibility study.

“We are also in discussions with State-owned power utility Eskom about offtake agreements and with potential export-product offtakers,” states Weber.

He points out that NCC will be combined with Roodekop to form one mining project, with a total run-of-mine (RoM) of close to three-million tonnes a year.

NCC has a coal beneficiation facility, with a capacity of about three-million tonnes a year, and is also fully equipped with mining machinery and infrastructure.

Universal has received all the required permits for mining to start at Roodekop and the company has closed the tendering process to opencast mine contractors for the first phase of the opencast mine’s establishment.

The mine, once fully established, will comprise openpit and underground operations.

“Openpit operations will be situated largely on the Roodekop tenement area, while underground mining will be undertaken at NCC’s existing underground mine,” Weber adds.

Universal is also compiling its debt components for the new mining operation.

Weber says the starting of mining operations at the new project is contingent on the finalisation of the acquisition of NCC by Universal. Universal is hopeful that mining will start by June or July this year.

“It will take about a year for Roodekop’s openpit operations to reach steady-state production with first sales coming through about five months after start-up,” says Weber.

Once the second phase of NCC is brought into operation, Universal will produce more than five-million tonnes of RoM.

Weber points out that the company’s flagship project, Kangala, in Delmas, Mpumalanga, currently produces about 2.5-million tonnes of RoM with a yield of about 1.8-million tonnes of product, of which between 80 000 t to 100 000 t will be export-quality coal and the rest will delivered to Eskom.

Currently, Universal has an allocation of 50 000 t/y for the private-sector-owned Richards Bay Coal Terminal (RBCT), in KwaZulu-Natal, which is transported on road to Exxaro’s nearby Leeuwpan mine, where it is loaded onto trains and exported by Exxaro.

“When NCC is in operation, we will aim to increase our RBCT export allocation to about 450 000 t/y,” states Weber.

Meanwhile, Kangala colliery GM Petrie Erasmus informs Mining Weekly that Kangala sold its first coal to Eskom in April 2014, while the first batch of export coal was dispatched from the mine in October 2014.

“Kangala has a single 900-m-long pit, which is being mined in 40-m- × 100-m-wide blocks,” he points out.

Further, Universal chief development engineer Kevin Donaldson notes that the boxcut runs from east to west and the progression of the mine is running from the north to the south of the site.

Erasmus highlights that, since September, Kangala has not recorded any injuries on site. “For the period from February 2014 to January 2015, the lost-time-injury frequency rate stands at 1.13 for every million hours worked.”

Weber concludes that he is upbeat about the long-term prospects for Universal’s operations, owing to the growing demand for coal to supply local and global coal-fired power stations.