Name of the Project
Menar coal and anthracite projects.
Location
Gauteng, KwaZulu-Natal and Mpumalanga, in South Africa.
Project Owner/s
Menar, through its subsidiaries Kangra and Canyon Coal.
Project Description
Menar, through its subsidiaries, expects to produce 20-million tons of coal a year from 2022/23.
Several projects are proposed, including:
- the Bekezela (formerly Palmietkuilen) project, located near Springs, in Gauteng. It will be an opencast mine producing 600 000 t a month of run-of-mine (RoM) coal at steady-state production, with a life-of-mine (LoM) of about 19 years (excluding construction phase).
- the Gugulethu (formerly De Wittekrans) project, located south of Hendrina, in Mpumalanga, which will be an opencast and underground operation, with an estimated 25-year LoM, based on RoM production of 300 000 t a month.
- the Witfontein underground and opencast coal project, north-west of Bethal, in Mpumalanga, which has an estimated LoM of nine years, based on RoM production of about 100 000 t a month.
- the Riversdale Anthracite Colliery project (RAC), in Vryheid, KwaZulu-Natal, will be an underground project with a six-year LoM, based on RoM production of 30 000 t a month.
- the Springfield opencast project, in Vereeniging, Gauteng, with an LoM of about 36 years, based on RoM production of about 600 000 t a month.
- the Driefontein opencast project, in Middelburg, Mpumalanga, with an LoM of about eight years, based on RoM production of about 50 000 t a month.
- the Koppie underground project, in Bethal, Mpumalanga, with an LoM of about 20 years, based on RoM of about 150 000 t a month.
- the Birmingham underground project, in Hendrina, Mpumalanga, with an LoM of 13 years, based on RoM production of 300 000 t a month.
- Aasvoëlkrans underground project, 10 km north-west of Utrecht, in KwaZulu-Natal, with an LoM of eight years, which is based on RoM production of about 68 000 t a month.
- Mngeni Shaft will extend the LoM of the Zululand Anthracite Colliery (ZAC), located about 27 km north-east of Ulundi, and has an LoM of about 3.5 years, based on RoM production of about 25 000 t a month.
- the Kusipongo underground project, outside of Piet Retief, in Mpumalanga, with an LoM of more than 20 years based on RoM production of 125 000 t a month.
Menar has ramped up the Khanye Colliery, in Bronkhorstspruit, Gauteng, which is producing 2.4-million tons of coal a year. The Hakhano Colliery – the group’s first opencast mine – processing plant will be restarted once a new nearby mining project receives the required authorisations.
Mining operations started at the Phalanndwa Colliery Extension following the first large-scale blasting of coal on July 17, 2019. The extension project is expected to extend the LoM to 2025. The project has reached steady-state production and is producing an average of 120 000 t a month of RoM.
Potential Job Creation
Menar projects are expected to create 5 600 jobs, including 320 at the Bekezela project, 430 jobs at the Gugulethu project, 200 jobs at the Witfontein coal project, 200 jobs at the Riversdale Anthracite Colliery and 400 jobs at the Springfield opencast mine. Aasvoëlkrans will create about 70 jobs, and Mngeni Shaft about 200 jobs.
The operating Khanye Colliery employs 400 people. The Phalanndwa Colliery extension project employs 200 people.
Net Present Value/Internal Rate of Return
Not stated.
Capital Expenditure
Menar plans to invest about R7-billion in coal projects from now until 2023 – including R1.5-billion in Bekezela, and R600-million in Phase 1 for Gugulethu, R1.5-billion in the Springfield project, R700-million in the Witfontein project, R1-billion in the Birmingham and Koppie projects, R300-million in Riversdale Anthracite Colliery, about R388-million in Aasvoëlkrans, and about R130-million in the Mngeni Shaft development.
Planned Start/End Date
Gugulethu and Bekezela are expected to start production in 2022, while Witfontein is expected to begin in 2023. The development of the Riversdale project will also start in 2022.
The Springfield project is expected to start production in 2023, as is the development of the Birmingham, Koppie and Aasvoëlkrans projects.
Mngeni Shaft will start with production during the second quarter of 2022.
The start dates for the projects are subject to coal market conditions.
Latest Developments
In December 2021, Canyon Coal changed the name of one of its collieries from De Wittekrans to Gugulethu ahead of the start of construction. The new name means “our value” or “our pride” in Nguni languages.
“The purpose of the name change was to better reflect the project’s African heritage, as well as the value and pride that the project holds in our group as a future flagship project,” Menar project head Gerhard Cronje said.
Subject to market conditions and the availability of export trains, construction of the greenfield Gugulethu colliery is planned to start in the first quarter of this year. The construction of the new mine will take about eight to ten months.
The global effect of Covid-19 on coal prices has caused a delay in the project breaking ground. After reassessing the viability of the mine, with current and forecast coal prices taken into account, the company found the Gugulethu project remained feasible, given the dynamics of the mine and the ore.
The mine will require supporting infrastructure, including a dedicated 400 t/h beneficiation plant to wash and separate the mined thermal coal on site and prepare it for sale. Cronje explains that coal beneficiation provides substantial economic benefits as the coal can be upgraded to a saleable product that repositions the mine to a preferable position along the cost curve.
Additionally, pollution control dams will be built for dirty water containment, as well as clean water storage, sewage treatment facilities, power supply infrastructure, fuel storage, haul roads, workshops, ablutions and offices.
Phase 1 will comprise three pits, one of which has been designed with the specific purpose of gaining access to the underground reserve. Phase 2 comprises the underground mining section planned for development later on.
“We regard the opencast component of this project as the key to unlocking the full potential and it will, therefore, fund the capital for the larger underground section,” says Cronje.
The opencast phase is estimated to have an LoM of about seven years based on RoM production of about 200 000 t a month, while the underground portion will extend the LoM for another 19 years. The underground portion is expected to start development towards the end of the opencast section’s life. This will likely occur in about the fourth quarter of 2027.
Cronje notes, however, that Canyon Coal has allowed for the flexibility to mine the underground reserve at any time during the opencast operations, should the company choose to ramp up production.
Meanwhile, pending offtake negotiations, construction of the new Bekezela Colliery and its facilities is planned to start in the first quarter of this year
The construction of the colliery and its facilities is expected to take between eight and ten months to complete.
The construction of the new mine’s infrastructure has not started yet.
The Bekezela Colliery will be an opencast mine, with a target production of 600 000 t a month of RoM production once at steady-state production. The LoM period of 19 years excludes the construction phase of the project.
The single pit opencast coal mine will require a variety of newly built supporting infrastructure, as none of the facilities from Ukufisa will be shared or repurposed. The investment value of the Bekezela Colliery is estimated to be about R1.5-billion.
The new infrastructure will feature a brand-new beneficiation plant, capable of processing the thermal RoM coal into saleable product on site.
Power supply infrastructure, fuel storage, haul roads, workshops, offices and ablution facilities will also be constructed on the surface.
Moreover, nine new 90 t excavators will be bought for the mine, as well as 27 new 60 t articulated dump trucks. Six dozers, two graders and three water bowsers will be added to the fleet.
The new colliery will create about 320 direct job opportunities for local community members.
Key Contracts, Suppliers and Consultants
ZAC:
Phillips, JA Engineering; Sandvik; Volvo; ZNZ Construction & Projects; Ntwanaza Logistics; Mhobozeli; Beautiful Landscaping; Zululand Bus Services; Zamokuhle MJ Catering & Other Services; Uzamile Trading; Increase Business Construction; Thuthukani Trading Co-Operative; Izithenjwa Corporative Enterprise; Emhlophe Investments & Trading; Khumbulani N Son; Ikusasa Lama Jola; Babazani Construction & Projects; and Dibanto General Services.
Kangra:
Phillips; JA Engineering; Sandvik; Volvo; CAT; Mumnkosi Project & Services; Zama Phangwa Construction; Macina Building & General Maintenance; Mgquzeni Mining; Foloyi Construction and Projects; Donkerhoek Mining Projects (DMS); and DDK Logistics.
Canyon Coal:
Volvo; CAT; Bell; Komatsu; Mbalenhle Tours And Construction; African Pro Mining & Supplies; Dube Solution; Grapeseed Trading 102; Skipgo; Golden Reno Trading and Project; Highlands Commodities cc; Kungwini Mica; Malefo Holdings; Mulwane Trading and Projects; Nduzane General Trade; Phoka Goje Transport and Services; W Masuku Transport and Projects; Zonke General Trading cc; Summer Triangle Trading; Royal Pros Services; Madlayedwa Transport; Mrholozi Group; Kardicks Logisticks; Sesupha Solutions; Netshipise Business Solutions; Future Rise Enterprise; Thuthukisa Izwe Trading; Atang Holdings; IK Mnguni; Kgaditse Prestige Events; Ndimande Logistics and Transport Mancamane Trading Enterprise; SSW Signs & Reflective; Malele Hydraulics; Malefo Mining services; Nkosana Sizwe Trading Enterprise; 1st Episode Trading; Two Mosquitos; Road Science Technology; Armoured Enterprise; Amandla Mining Service; Starcrow 36; Buhlebuta Business Enterprises; JD Hydraulics; Afikile Construction ; NTT Toyota Delmas; Maphangela; Bakone Bakopane; PTM Trading; Khethowakho Trading & Projects; Inelco International; Xclusive energy; BMG Delmas; Morgan Gift; and Enhle projects.
Contact Details for Project Information
Menar tel +27 11 783 7996 or email info@menar.com.