Name and Location
Penumbra coal project, Mpumalanga, South Africa.

Client
Continental Coal.

Project Description
The Penumbra coal project has estimated gross saleable reserves of 5.4-million tonnes and gross on-site coal resources of about 68.3-million tonnes, which are contained within the C-lower coal seam, at an average seam height of 1.8 m and at a depth of between 50 m and 115 m.

It is located in the Ermelo coalfield, 3 km from the Ferreira opencast mine and 2 km from the Anthra railway siding on the coal line to Richards Bay, in Durban, KwaZulu-Natal.

The project will be developed as a conventional underground bord-and-pillar mining operation. Access to the coal seam will be established through a portal and the sinking of twin declines at 8° to the coal seam. The declines will be about 200 m long – one will be equipped with a conveyor and the other will serve as a men-and-materials access route. They will serve as the primary ventilation intakes of the colliery, each with airflow velocities within industry norms.

Two mechanised coal-production sections are envisaged, each with a continuous miner. One section will be equipped with three shuttle cars, which are better suited to midseam mining heights, and the other with battery haulers, which are better suited to low-seam mining heights.

The mine is forecast to produce yearly run-of-mine (RoM) production of 750 000 t. The coal produced will be beneficiated through the existing Delta processing operation, which comprises a 1.8-million-tonne-a-year coal processing plant, and the 1.2-million-tonne-a-year Anthra rail sliding.

Planned production for the mine is about 500 000 t/y of primary export thermal coal and 120 000 t/y of secondary domestic-quality thermal coal. The overall yield is 81%.

The export product will be railed from the existing rail siding to the Richards Bay Coal Terminal (RBCT) under existing rail contracts and the product will be sold under existing offtake agreements.

Value
The forecast cost to complete the project is $40-million.

Duration
Development started in September 2011, with the excavation of the box-cut to a depth of 18 m, followed by the development of the twin declines. The first blast in the decline was completed in early February 2012.

Full production is scheduled for June 30, 2013.

Latest Developments
Continental Coal has announced various operational improvements at its recently commissioned Penumbra coal mine.

Production build-up at Penumbra is on target to achieve its design capacity of 63 000 t/m RoM by November 2013. RoM production for July and August 2013 increased to an average of 26 787 t/m, a 35% improvement on the average monthly production of 19 895 t/m  achieved in the second quarter of this year.

The commissioning of the permanent ventilation shaft in August 2013 was the last remaining infrastructure required to reach the design capacity of 63 000 t/m. With adequate ventilation in place since early September 2013, both continuous miner sections were fully operational and established the planned mining outlay of nine road production sections.

RoM production for September 2013 has already exceeded 20 000 t and is trending towards the planned 40 000 t for the month. Achieving the planned production for this month will also alleviate logistical congestion around the main conveyor and lay a sound foundation for the planned 50 000 RoM tonnes planned for October 2013.

Another positive development is the improvement in the yield as the mining sections are being established. The average yield for the month-to-date is about 59%, a marked improvement on the average yield of 44% achieved in July and August 2013, and the average yield of 37% achieved in the second quarter of this year.

A drill-and-blast section will be added to the two continuous miner sections during November 2013, which will add flexibility to maintain the planned production rate. Each continuous miner section currently has two shuttle cars, with the third cars expected in December 2013, creating further flexibility for steady-state production.

All required surface infrastructure has been completed and the installation of the underground substations is in progress. The installation of the substations has no impact on the planned production rate.

Key Contracts and Suppliers
Murray & Roberts (twin declines), Leomat (civils contract), Joy Mining Machinery (underground mining equipment) and ABSA Capital (loan facility).

On Budget and on Time?
The project is currently within budget; however, Continental is slightly overlapping the timeframe, owing to a few challenges during the development phase and further restrictions that were issued when it received its integrated water use licence.

Continental had to move the position of the shaft, which cost money and set it back a few weeks, but it managed to change the mine design and carry on with construction.

Contact Details for Project Information
Continental Coal CEO Don Turvey, tel +27 11 881 1420 or fax +27 11 881 1423.
ABSA Capital marketing and communications associate principal Graeme Coetzee, tel +27 11 895 6695, cell +27 79 695 9798 or email graeme.coetzee@absacapital.com.
M&R corporate communications executive Ed Jardim, tel +27 11 456 6200, fax +27 11 455 1322 or email eduard.jardim@murrob.com.
Leomat, tel +27 35 797 4611, fax +27 35 797 3344 or email info@leomat.net or construction@leomat.net.
Joy Mining Machinery (South Africa), tel +27 11 634 2226, fax +27 11 634 8923 or email southafricasales@joy.com.