PERTH (miningweekly.com) – South Africa-focused coal miner Universal Coal on Friday said that activities at its New Clydesdale colliery (NCC) would be dependent on the company concluding a coal supply agreement with South African power utility Eskom.

In July last year, Universal received clearance to start recommissioning work at the colliery, after the transfer of ownership of the project was approved.

The NCC was acquired from South African coal major Exxaro Resources in 2014, which placed the operation in care and maintenance at the end of 2013.

Universal CEO Tony Weber said on Friday that the company was "keen" to start commissioning activities ahead of first production.

“We continue to engage Eskom and hope to provide the market with an update in due course,” Weber added.

The first phase of the NCC would involve the development of an opencast operation at the Roodekop deposit, with the recommissioning of the NCC processing facilities to meet the demand of the initial tonnage throughput.

At full capacity, the project would produce two-million tonnes a year of run-of-mine (RoM) coal for domestic use. Universal was currently negotiating a long-term sales agreement with power and metallurgical offtake partners.

The NCC had a reserve of 40.5-million tonnes, and was expected to have a mine life of more than 20 years.

Meanwhile, Universal on Friday also reported that despite a 12% increase in production during the December quarter, compared with the previous quarter, results for the period were below expectations.

RoM production for the quarter was up from 687 000 t to 767 000 t, domestic sales were down 9%, to 454 000 t and export sales were down 52%, to 13 000 t.

RoM production from the Kangala colliery was below expectations, owing to a reconfiguration of the pit and a greater focus on pre-stripping, aimed at exposing more mining blocks that would allow production flexibility, in anticipation of potential long-term increases in demand, the miner said.

Domestic sales were down owing to a short pause in supply, while export sales were lower owing to the erratic nature of the midseam coal in the current mining area of the pit.

“Tough operating conditions were experienced during the December quarter at the Kangala colliery, with focus placed on the pit reconfiguration and additional stripping activities required for the updated rock mechanic engineering requirements, and difficult mining conditions experienced in the pit,” said Weber.

“Through a concerted effort from our mining contractor, we are making significant progress towards returning to steady-state production conditions, which are anticipated in the next month or so.”