ASX-listed coal miner Universal Coal is ramping up production at its Kangala project, in Delmas, Mpumalanga, which is scheduled to produce about 50 000 t of coal between November and December, ramping up to 200 000 t/m by March 2014.

Universal Coal is expecting average earn- ings of A$15-million a year over the life-of-mine (LoM) before interest, taxes, depreciation and amortisation, according to the company’s website.

Mining Weekly was invited to the project site last month, where Universal Coal chief development engineer Kevin Donaldson stated that the project was expected to produce about 2.4- million tons a year over the eight-year LoM.

“We are on track with our original timeline, and cold commissioning of the Kangala crushing and screening plant has started, with assembly well under way,” he stated, adding that hot commissioning of the plant was due to start this month.

Donaldson explained that, once the crushing and screening plant had been commissioned, it would allow for about 75% of run-of-mine production to be processed and sent to market.

“The remaining dense-medium cyclone separator circuit of the plant is expected to be completed by April 2014, which will enable full production,” he stated.

Two-million tons a year of the mine’s coal has already been allocated to State-owned power utility Eskom.

“We signed the coal supply agreement with Eskom in March, which also allowed for the signing of contracts with the other main contractors,” stated Donaldson.

He added that the company was able to order the long-lead items for the washing plant once the contracts with Eskom had been signed.

“Offsite construction of the coal washing plant began in March, while the site establish- ment began in May, along with the construction of the infrastructure,” Universal Coal engineering manager Petrie Erasmus told Mining Weekly.

He noted that the offsite construction and dry commissioning of the BC1/BC2 crushing and screening circuit had been completed in September and that the circuit had been transported to site that same month.

“On-site construction of this circuit is well under way,” Donaldson said, adding that the construction of the pollution control dam and paved product haul road were progressing according to schedule.

He added that Kangala’s first boxcut started in the first week of June, with first saleable coal expected in February 2014, two months ahead of schedule.

Mining contractor Stefanutti Stocks Mining Services (SSMS) was contracted to conduct the mining operations for the Kangala project and supplies all the equipment for the mining operations.

“SSMS has taken delivery of its first Komatsu HM400-3 articulated dump trucks (ADTs) and new Komatsu 465 rear dump trucks,” stated Donaldson, adding that the HM400-3 ADTs were the first of this series to be delivered in South Africa.

Further, he noted that Kangala had a measured and indicated resource base of about 146-million tons, of which about 22-million tons was in the current mine plan. The remain- ing measured and indicated resources were being converted into reserves.

The coal supply arrangement secured Kangala’s revenues for the first eight years of operation and could be extended for a further eight years through an agreement with Eskom. “This is subject to the conversion of the current resource base to viable reserves, but the LoM is longer than the latter,” he stated.

Site Safety

Donaldson told Mining Weekly that health and safety were “paramount” to the company, adding that the standards were extremely high and that a safety management system had been established in January, together with all mandatory Codes of Practice (CoPs) relating to the Kangala operations, which were compiled in February.

He added that the safety management system standards and CoPs were constantly reviewed to ensure that they remained current with the work being undertaken at the mine.

“Continuous monitoring of dust, noise and pollution levels are conducted and any deviations are noted and mechanisms put in place to correct them,” Donaldson emphasised.

Overcoming Challenges

Donaldson explained that the Victor Khanye local municipality, previously known as Delmas, where the mine is located, had a high unemployment rate and, as such, expectations from the local community were high that the mine would provide desperately needed jobs.

“The mine can unfortunately not solve the unemployment problem in Delmas, but we can contribute to the upliftment of the local area and community,” explained Donaldson.

The mine currently employs about 280 people. This figure includes permanent opera- tions personnel and contractors currently involved in the construction of the infrastructure and washing plant.

“However, at full production, the mine will employ about 250 people, of whom about 90% will be local residents” stated Donaldson, adding that the shortage of skills in the area proved challenging.

“To overcome the local skills challenge, Universal Coal is providing on-site job training and is cofunding the establishment of a further education and training (FET) college – the name of which has not been finalised yet – which will assist in alleviating the skills shortage in the area,” he highlighted.

Further, he noted that Universal Coal was involved in community-approved projects together with the Local Economic Develop- ment Forum. The first project would involve the development and construction of the FET college, where residents could acquire the skills needed to improve their employability. Donaldson said these community development projects were scheduled to start in the first quarter of 2014.

“Currently, the state of the surrounding infrastructure has not had an effect on the operation. However, going forward, this situa- tion is bound to change. We are contracted to supply Eskom with two-million tons of coal a month and transport to market will result in increased local traffic,” he stated.

Future Project Possibilities

Universal Coal had interests in five coal projects in South Africa, which contained more than 1.9-billion tonnes of Australasian Joint Ore Reserves Committee- (Jorc-) compliant resources, of which more than one-billion tonnes was attributable to the company, said Donaldson.

“Following the Kangala project will be the development of the export-focused Roodekop project, in the Kriel district, 35 km south of eMalahleni, and the Brakfontein project, in the Delmas district, 15 km south-east of Kangala. These developments are subject to positive feasibility studies, financing and other regulatory approvals,” he stated.

In addition to the thermal coal projects, the company completed earn-in agreements on two coking coal projects, in Limpopo, in August. The Berenice-Cygnus project is located in the Soutpansberg coalfield, 90 km south-west of Musina, and the Somerville-Donkin project, located in the Tuli coalfield, north-west of the Soutpansberg.

Donaldson stated that the proposed project sites contained about 1.67-billion tons of Jorc-compliant resources.