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Company renames asset, invests in renewables

11th March 2016

By: Simon Sonnekus

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Sandton-based coal mining company Delta Mining Consolidated (DMC) has renamed its flagship Rietkuil coal asset, near Delmas, in Mpumalanga, the Nsele coal project after its re-evaluation and now looks to supply coal to State-owned power utility Eskom instead of exporting B-grade coal.

DMC is a subsidiary of mining, manufacturing and agriculture investment company Anglo African Capital (AAC).

DMC CEO Heine van Niekerk believes that the project will be successful, owing to Eskom’s dire need for a sustainable source of coal, adding that DMC has had to reconsider the original feasibility of Nsele, contracting mining consultant VBKom to redesign the mining plan and layout, which was completed in December.

He says DMC is waiting to reach an agreement with Eskom, subsequent to the utility issuing a new request for proposals, to eventually supply Eskom with coal, and that it could take up to eight months after an agreement has been reached before DMC can start producing coal.

The new development strategy is to start mining on the north-eastern half of the property, the location of 77.5-million tons of the 199-million tons of gross tons in situ coal.

“We will be able to supply the Matla, Kriel, Kusile and Kendal plants with in spec coal. We will also be able to mine about 68-million tons of coal at a production capacity of three-million tons of run-of-mine coal a year. This, in turn, will provide . . . a 23-year life-of-mine,” Van Niekerk states.

He notes that the mining project’s relatively close proximity to the parastatal’s power stations makes the increased demand for the coal mined at Nsele desirable and, subsequently, broadens the company’s supplier base.

Van Niekerk avers that the accessibility of the coal seams will enable DMC to be involved in the power producer’s short- and long-term plans.

Alternative Energy

DMC reached a memorandum of understanding with Russian gas provider Gazprom Promgaz at the end of last year to secure the sole distribution rights for sub-Saharan Africa for Gazprom’s underground coal gasification technology.

Van Niekerk is excited about the technology – to be implemented at DMC’s coal assets in the Springbok flats, in Limpopo – as DMC has joined the ranks of the many coal mines worldwide that have implemented renewable solutions for energy production.

“Coal producers have certainly engaged in . . . supplying coal to independent power producers, as well as addressing cleaner energy. This means they are considering alternatives, such as gasification and using coal for alternative fuels. These alternatives are gaining traction in the industry and are becoming more cost effective for mines,” he says.

Van Niekerk notes that other coal companies, such as coal and heavy minerals miner Exxaro, have teamed up with privately owned energy company Cennergi and Indian multinational Tata to produce 16 GW of renewable wind and solar energy in South Africa, Namibia and Botswana by 2025. DMC hopes that, with the Gazprom gasification project, it can also contribute considerably to alternative energy development in South Africa.

“South Africa can look forward to new innovative thinking regarding coal,” declares Van Niekerk.

The company still promotes the production of thermal coal because of the immanent energy solutions it offers, but has investigated cleaner forms of energy using coal and coal gasification techniques.

“Coal gasification, especially with the help of Gazprom’s tested solutions, will provide a new scope for job creation and economic growth in South Africa. Several senior executives in the coal industry have realised that a more sustainable solution than the burning of fossil fuels is needed. This has led to a strong, responsible reaction from executives to pursue more sustainable avenues.”

He notes that role-players in the mining industry have investigated alternative sources of energy and cleaner forms of technology pertaining to coal mining and processing.

“This gives me hope for the future of the industry. Coal companies have shown that they can accept responsibility by taking renewable energy into account, along with the production of thermal coal,” he concludes.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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