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Menar coal projects, South Africa – update

9th April 2021

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Menar coal projects.

Location
Gauteng, KwaZulu-Natal and Mpumalanga, in South Africa.

Project Owner/s
Menar, through its subsidiaries Kangra and Canyon Coal.

Project Description
Menar, through its subsidiaries, expects to produce 20-million tons of coal a year from 2022/23.

Several projects are proposed, including:

  • the Bekezela project, located near Springs, in Gauteng. It will be an opencast mine producing 600 000 tons a month of coal at steady-state production, with a life of mine of about 22 years.
  • the De Wittekrans project, located south of Hendrina, in Mpumalanga, which will be an opencast and underground operation, with an estimated 25-year life-of-mine (LoM), based on run-of-mine (RoM) production of 200 000 t a month.
  • the Witfontein underground and opencast coal project, north-west of Bethal, in Mpumalanga, which has an estimated LoM of nine years, based on RoM production of about 100 000 t a month.
  • the Riversdale Anthracite Colliery project (RAC), in Vryheid, KwaZulu-Natal, will be an underground project with a six-year LoM, based on RoM production of 30 000 t a month.
  • the Springfield opencast project, in Vereeniging, Gauteng, with an LoM of about 36 years, based on RoM production of about 600 000 t a month.
  • the Driefontein opencast project, in Middelburg, Mpumalanga, with an LoM of about eight years, based on RoM production of about 50 000 t a month.
  • the Koppie underground project, in Bethal, Mpumalanga, with an LoM of about 20 years, based on RoM of about 150 000 t a month.
  • the Birmingham underground project, in Hendrina, Mpumalanga, with an LoM of 13 years, based on RoM production of 300 000 t a month.
  • the Kusipongo underground project, outside of Piet Retief, in Mpumalanga, with LoM of more than 20 years based on a RoM production of 125 000 t a month.

Menar has ramped up the Khanye Colliery, in Bronkhorstspruit, Gauteng, which is producing 2.4-million tons of coal a year. The Hakhano Colliery – the group’s first opencast mine – processing plant will be restarted once a new nearby mining project receives the required licences.

Mining operations started at the Phalanndwa Colliery Extension following the first large-scale blasting of coal on July, 17, 2019. The extension project is expected to extend the LoM to 2025. The project has reached steady-state production and is producing an average of 120 000 t a month of RoM.

Potential Job Creation
Menar coal projects are expected to create 5 600 jobs, including direct employment of 320 jobs at the Bekezela project, 430 jobs at the De Wittekrans project, 200 jobs at the Witfontein coal project, 200 jobs at the Riversdale Anthracite Colliery and 400 jobs at the Springfield opencast mine.

The operating Khanye Colliery employs 400 people. The Phalanndwa Colliery extension project employs 200 people.

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
Menar plans to invest R7-billion in coal projects from now until 2023 – including R1.5-billion in the Bekezela and De Wittekrans projects, R1.5-billion in the Springfield project, R700-million in the Witfontein project, R1-billion in the Birmingham and Koppie projects, and R300-million in the Riversdale Anthracite Colliery.

Planned Start/End Date
De Wittekrans and Bekezela are expected to start production in 2021, while Witfontein is expected to begin in 2022. The development of the Riversdale project will also start in early 2022.

The Springfield project is expected to start production in 2022, as is the development of the Birmingham and Koppie projects.

The start dates for the projects are subject to coal market conditions.

Latest Developments
Kangra will extend its Kangra mine through the Kusipongo project.

The Kusipongo resource is situated directly west of the existing mine and is expected to extend Kangra’s LoM significantly.

The Kusipongo mining right has an underground reserve of about

41.9-million tonnes of coal and, based on the latest resource statement, has an estimated LoM of more than 20 years, according to Menar KwaZulu-Natal operations COO Bradley Hammond.

Kangra was awarded a mining right for the Kusipongo resource in 2017 and is in the final stages of obtaining the necessary environmental approvals for the different adits needed to access the available resource.

The resource comprises predominantly underground reserves with a few opencast areas. The current mining right authorises underground mining within the north-eastern section of the right area. A Section 102 application has been lodged for three adits – Twyfelhoek, Balgarthen A and Balgarthen B – and opencast areas, which will allow for access to the underground reserves.

The three adits will provide access to about 42.1-million tonnes of coal.

The opencast mining areas comprise the Twyfelhoek (north-east section), Donkerhoek (north-west section) and Balgarthen (southern section) pits, which will collectively produce about 1.6-million tonnes of coal a year.

The Twyfelhoek adit is in the final stages of authorisation, with only the mining works programme approval still outstanding. Construction of the access road to Twyfelhoek will start in April 2021 and the adit will follow shortly thereafter.

The Balgarthen A adit is an existing adit that was mined in the early 1990s. Processes are still under way to obtain the necessary environmental approvals. Kangra intends to start mining operations within the next 14 months at the project.

Once all the environmental approvals for Balgarthen A have been obtained, the company will submit the necessary environmental applications for the Balgarthen B opencast and adit area. The mine expects that it will start mining operations at Balgarthen B within the next 22 months.

At the Balgarthen A project, documentation for environmental authorisation and water-use licences (WULs) has been submitted and is being processed.

The three new mining projects at Twyfelhoek, Balgarthen A and Balgarthen B will initially provide access to about 10.5-million tonnes of coal, which will be mined over the next eight years.

These areas will also allow for access to additional coal, estimated at 32.7-million tonnes, which has the potential of extending the LoM by another 21 years.

The Twyfelhoek adit has a budget of about R78.3-million and current expenditure is within budget. However, the budget excludes any future projects.

Environmental authorisation and a WUL have been received, and lease agreements have been secured with land owners. Mining of the boxcut is set to begin in April 2021, with first coal expected in the third quarter of 2021.

At the peak of the extension project, about 242 Kangra employees and about 260 contractors will be employed.

Community outreach, development and engagement remain key priorities in ensuring the successful extension of the Kangra mine.

The mine has managed to build a good relationship with the forums to ensure that local employment is promoted as far as possible to drive growth in local businesses, as well as the upskilling of the local community.

Key Contracts, Suppliers and Consultants
EXM Advisory Services (environmental consultants), GFK Consulting Engineers, Electrical Contractors Association (utilities contractors) and Precon Survey (geophysical surveying company).


Contact Details for Project Information
Menar tel +27 11 783 7996 or email info@menar.com.

Edited by Creamer Media Reporter

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