JSE-listed coal miner Wescoal says its Moabsvelden project implementation is progressing to plan with a contract mine having been selected.
The appointment, however, remains subject to a contract mining agreement being signed.
The company states that boxcut development and related infrastructure activities at Moabsvelden will start early next month, costing between R250-million and R290-million, once Wescoal concludes a transfer of acquired surface rights.
The project will start delivering coal to State-owned power utility Eskom in the second half of the year, ramping up to a target production volume of 200 000 t a month of run-of-mine coal over 18 months.
Moabsvelden is due to supply the Kusile power station for ten years at a rate of three-million tons of coal a year, which it will ramp up to in three phases.
Wescoal further says that its 50%-owned Arnot mine will restart operations during the second half of the year. Eskom is still due to respond to a coal supply tender for the Arnot power station.
Wescoal says the Arnot mine is well positioned to supply coal directly to the power station by conveyor belt, but other markets for coal are also being considered.
Meanwhile, the company confirms that an extension project for the Vanggatfontein 5 pit is under way to replace the Vanggatfontein 3 pit. The company will open a new boxcut for an additional mining pit and coal face.
The project is being pursued as a joint development with a neighbouring mining right holder, which will further enable extraction of about 450 000 t of boundary pillar area coal that would otherwise have been sterilised.
Wescoal says the primary development phase for the Vanggatfontein 5 pit will be complete by September, at which point the joint project will be dissolved and mining activities integrated with existing Vanggatfontein operations.
The company further continues to advance a formal disposal process related to its noncore Leeuw Braakfontein Colliery.
QUARTERLY PRODUCTION
Wescoal produced 13% higher volumes in the quarter ended December 31, compared with the quarter ended December 31, 2018.
However, production was 8% lower when compared with the quarter ended September 30, 2019.
Wescoal says this was owing to all operations having been affected by unprecedented levels of rainfall during December, which led to severe flooding at the Khanyisa mine.
The company expects to see a moderate improvement in production volumes for the quarter ending March 31.
Wescoal anticipates further production contributions in due course from the Vanggatfontein 5 pit optimisation, the Arnot mine and new production from the Moabsvelden project.