The ramp-up of export production from coal junior Beacon Hill Resources’ Minas Moatize mine would be phased in to match the company’s anticipated rail capacity on the Sena rail line, in Mozambique.

The company’s rail capacity would start at 500 000 t/y.

Following the $1.1-million upgrade of the Phase 2A 1.8-million-ton-a-year run-of-mine (RoM) wash plant, which is on target to be commissioned this month, the company’s board decided to focus its mining activities initially on high-value coking coal production and shipments.

Coking coal will be transported to the Port of Beira using trucks until the arrival of rolling stock from South Africa during the second or third quarter of 2013 and the start of the company’s rail operations on the Sena line, which is subject to a definitive rail allocation.

Minas Moatize entered into a preliminary heads of agreement on January 15 to lease five locomotives and 90 rail wagons to bulk-transport coal along the Sena rail line.

Revised Mining Plan A revised mining plan suggested that the existing openpit would be mined deeper to access the lower Chipanga seam, which would yield good-quality coking coal sooner than envisaged in the previous plan.

MD Rowan Karstel said in a statement that the company had implemented a strategy to deliver an estimated $80-million reduction in the proposed capital expenditure (capex) associated with the expansion of Minas Moatize, but which should still see the company achieve plant capacity of 2.8-million tons a year by the end of 2013.

In this regard, the board decided to not proceed with the Phase 3 plant expansion to four-million tons a year for $150-million, as originally envisaged in the definitive feasibility study, as the Phase 2B and 2C upgrade offered materially less capex, taking the RoM wash plant capacity to 2.8-million tons a year for about $16-million.

“Our key challenge operationally will be to increase production from 650 000 t/y to 2.8-million tons a year and we have successfully recruited middle management to oversee the increase in production from the upgraded wash plant,” Karstel noted.

The optimised scenario increased the life-of-mine from 10.5 years to 15 years, with potential to extend this further.

The upgrade resulted in mining and processing operations being minimal throughout the fourth quarter, with 3 013 t of RoM coal being mined, compared with the previous quarter’s 64 020 t, and 2 722 t of saleable coal produced, down from 26 370 t in the third quarter.

In January, Beacon Hill announced that an infill drilling programme undertaken in 2012 increased Minas Moatize’s Joint Ore Reserves Committee-compliant coal resource by 31% to 86.8-million tons.

Meanwhile, a cost-cutting plan was implemented throughout the quarter to materially reduce expatriate labour costs in 2013. The plan will initially result in Beacon Hill closing its Australian office and rationalising the management and finance function into Johannesburg and Tete, Mozambique, by March.