PERTH (miningweekly.com) – South Africa focused coal miner Universal Coal has unveiled plans to expand its Kangala colliery with the acquisition of a 29% interest in the adjacent Eloff project.
The ASX-listed Universal on Wednesday reported that the company, through its 49%-held subsidiary Universal Coal Development IV, had taken a 29% stake in Eloff Mining Company for A$4.35-million.
The Eloff project is contiguous to the existing Kangala Colliery, and hosts a mineral resource of 242-million tonnes. Universal noted that the Eloff deposit was a direct extension of Kangala’s current pit and that it would require limited future development capital, resulting in significant cost savings in monetising the Eloff project.
Universal plans to fund its share of the Eloff project’s funding requirements from the operating cash flow generated from existing projects.
“We are delighted to have acquired a stake in Eloff, an asset which has the potential to increase capacity and sustainability at our first operation, Kangala, which continues to exceed original guidance,” said Universal CEO Tony Weber.
“Record sales were achieved in June 2017 and Kangala has delivered strong cash flows throughout the 2017 financial year through increased sales of 2.4-million tonnes a year.”
Weber noted that with the New Clydesdale Colliery now starting to achieve nameplate sales tonnage, Universal was looking forward to similar improvements in efficiencies being achieved over the next year, providing the company with its second, long-term significant coal producing asset within the span of two years.
Opencut operations at New Clydesdale started in January this year as part of the second phase of the planned 3.3-million-tonne-a-year run-of-mine development.