Over R1.4 billion to be invested in Gugulethu Colliery which will employ 430 people.

Canyon Coal, a subsidiary of private investment company Menar, is constructing a new coal mine in Hendrina, Mpumalanga. Production is expected to start in the second half of 2023. 

The first phase of the Gugulethu project, on track to be completed in 8-10 months, is expected to produce 1.2 million t/y of 5 500 kc NAR coal. “We are in the development phase and have already done the tenders for the civils and the processing plant. Our mining equipment has started to arrive,” states Gugulethu Colliery GM Jarmi Steyn.

Formerly known as De Wittekrans, Gugulethu is a greenfield project located southeast of Hendrina that Canyon bought out of business rescue. Phase 1 of the project holds an economically mineable reserve of 14.3 million tons of run-of-mine (RoM) coal. It comprises of three pits, one of which has been specifically designed to gain access to the underground reserve, as part of Phase 2.

This fully licensed project has a life of mine of over 20 years based on a RoM production of about 2.4 million tons a year from the opencast section. The underground sections, which will commence operations in 2028 after the completion of the open cast reserve, will sustain production of 2.4 million tons a year.

The commissioning of the processing plant is scheduled towards the end of 2023. The transfer of the plant from the depleted Hakhano mine – Canyon’s first opencast colliery – for re-assembly at Gugulethu has begun.

Total investment earmarked to develop the mine is over R1.4 billion. Canyon Coal will invest R600 million in Phase 1 of the project. The development of the underground mining section will require a further R890 million.

Gugulethu’s product will be trucked some 43 km to the Rietkuil siding for transportation to the Richards Bay Coal Terminal in KwaZulu-Natal.

All of Canyon Coal’s export allocation at the terminal is in use but the capacity for Gugulethu’s tonnages will free up when the company’s 1.4 million ton-a-year Phalanndwa Colliery in Delmas is closed later this year when it reaches the end of its life. Canyon exports some of its products through Grindrod’s Terminal de Carvao da Matola (TCM) port in Maputo.

The construction of Gugulethu’s opencast will create more than 200 jobs, with a priority given to residents of the host community. In total, the mine will create 430 jobs when it is fully operational. 

Steyn says her first goal for the Gugulethu Colliery is to ensure it is developed safely within schedule and budget. “Then along with the team, I want to see it become a flagship site for Canyon Coal in terms of regulatory compliance and production performance, obviously to ensure maximised stakeholder and shareholder value,” Steyn states. 

She notes that all the operations that she has previously managed and completed were already operational when she joined. But Gugulethu is special for her because she will oversee its execution from the beginning. “The project management portion thereof I look forward to as well as collaborating with the team to ensure the right things are done the first time around,” Steyn concludes.