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Universal signs offtake over Kangala

22nd July 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – South Africa-focused coal miner Universal Coal has signed an offtake agreement with coal major Exxaro.

Under the terms of the agreement, Universal would supply Exxaro with up to 100 000 t/y of export-quality coal from its Kangala mine, in the Witbank coalfield.

The Exxaro agreement was in addition to a domestic sales agreement with electricity supplier Eskom for two-million tonnes a year, and an export allocation through the Richards Bay Coal Terminal.

Universal said on Monday that it was on track to meet its production timeline, with Kangala on track to deliver a maiden production by October this year. Box-cut mining started in the first week of July, and initial stock from this operation would be used for the base of the stockpiles, to prevent contamination at a later stage, with the remaining product being used to commission the crushing and screening plant in December this year.

First saleable production was scheduled for February.

The A$46.8-million Kangala operation would deliver some 2.1-million tonnes of coal a year, at an operating cost of A$15/t, over an initial eight-year life-of-mine. The additional resource base at the project had the potential to extend the mine life to 20 years, by means of developing a series of similar-sized pits adjacent to the Wolvenfontein pit.

Edited by Creamer Media Reporter

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