JOHANNESBURG (miningweekly.com) – Following the start of commercial operation in February, Mine Restoration Investments' (MRI’s) coal briquetting plant, located at the Vaalkrantz colliery, in KwaZulu-Natal, continues its ramp-up and is expected to reach nameplate capacity of 5 000 t/m by July.

MRI reported earlier this month that the plant had produced 1 900 t of fine coal duff product in March, with the majority of this material being stockpiled to be delivered to offtake partner Keaton Energy in the next few weeks.

In addition to the ramp-up of the plant, the group said in its result statement for the year ended February 28 that it was concurrently trialling “innovative” screening equipment in conjunction with technology provider Virto.

“Their equipment greatly increases the yield of coal fine screens [and improves] quality. If the trial is successful, the company will look to enter into commercial arrangements to incorporate the technology into this and future projects.

“Our subsidiary company, Prodiflex Coal, responded to a request by miner Exxaro for a proposal [on] a solution for the coal fines at its Leeuwpan colliery, in Mpumalanga, and we are confident that we will come up with a viable solution, building on our experience at Vaalkrantz, which will form the basis of a competitive bid,” the company noted.

In a joint research project with MRI, Prodiflex Coal was also currently conducting testwork with Keaton Energy on samples of fines from its Vanggatfontein colliery.

MRI had, meanwhile, been in discussion with various owners of fines dumps in the Vryheid area for potential feedstock for the group’s existing plant.

This feedstock would be used to supplement supply from the current dump or for standalone projects.

“Some of these discussions are at an advanced stage, while others are still exploratory, but it is clear that there are significant business opportunities that the company can exploit over the next few years in this area,” MRI stated.

IMPENDING SHARE ISSUE

The company added that  it had faced “various” financial and operational challenges during the year but had, under the leadership of new CEO Richard Tait, negotiated “various lines of funding” to continue operations during the year.

“With cash flow being generated by the [briquetting] plant and the capital structure being bolstered through the upcoming share issues, the group is now in a position to begin focusing on opportunities to build similar plants and scale the technology that has been developed in-house,” it noted.

MRI informed its shareholders earlier this month that it intended to issue a maximum of 251.7-million new shares for cash at an issue price of R0.05 a share in settlement of an existing R12.5-million AfrAsia Special Opportunities Fund loan.

It would issue a further 66.3-million new shares for cash at an issue price of R0.05 a share in settlement of an existing R3.5-million Armadale Capital loan.

An additional ten-million new shares at R0.05 a share would be issued to settle corporate advisory fees owed to AfrAsia Corporate Finance, while ten-million new shares would be issued to Tait and another 13-million shares would be issued to settle directors and employees fees.

AMD IMPAIRMENT

MRI also reported on Monday that after careful consideration of the circumstances surrounding the near-term commercial application of the group’s acid mine drainage (AMD) technology, the board had decided to impair the asset.

Between 2007 and 2011, the company invested a significant amount of capital in research and development of a solution to the AMD crisis facing the mining industry on the Witwatersrand basin.

However, as no concrete evidence with regard to the commercialisation of the technology in the foreseeable future could be demonstrated, the board impaired the AMD project to zero.

Despite the impairment of the asset, MRI said it would continue to treat this project as a strategic focus of the group, given the prior investment in the technology and its relevance amid increasing environmental pressures.

“Management will continue to engage with the Department of Water Affairs and other stakeholders to better understand the process to be undertaken and to assess our realistic chances of being part of the future of this project. Management is also actively investigating avenues for commercialising the technology in the private sector,” the company stated.

FINANCIAL RESULTS

Looking to the company’s financial performance for the year under review, MRI posted a group loss of R56.3-million, which it largely attributed to the impairment of the AMD project.

Capital and reserves at the financial year-end was R2.6-million, while total assets amounted to R72.5-million.

No dividends were declared.