Wescoal CEO Waheed Sulaiman
JOHANNESBURG (miningweekly.com) - Junior coal miner Wescoal Holdings on Wednesday said the Keaton Coal integration programme was at an advanced stage and progressing according to plan, with personnel redeployments and overhead reductions having been completed.
"Several identified improvement and efficiency projects have been implemented, including systems integration with the aim of common reporting and resource management across the Wescoal Group being well under way.
"[Keaton's] projects represent low-risk value enhancement opportunities which support the group's philosophy around standardisation and scalability," CEO Waheed Sulaiman highlighted.
Immediate operational cost savings and efficiencies identified during the acquisition due diligence have been implemented with the combined effect of savings in excess of R40-million a year.
Additionally, mining operations at Vanggatfontein, formerly Keaton's flagship mine, were progressing well, with its integration into Wescoal also at an advanced stage.
Meanwhile, Wescoal said it would focus on augmenting its board's skillset and independence in the coming months, which would ensure the miner continued to be well positioned to take advantage of value-enhancing opportunities in a sustainable manner.
Total run-of-mine (RoM) production attributable to Wescoal increased to 4.8-million tonnes in the year ended December 31. This was double the volume produced during the prior comparable period, with the group now well on its way to achieving its announced eight-million-tonne-a-year RoM production target.
Production at Elandspruit was ramped up to take advantage of spot sale opportunities and the mine was on track to comfortably exceed its yearly target of 2.5-million tonnes.
During October 2017, a new mining contractor was introduced at Elandspruit. The transition was carefully planned and well executed - it was concluded safely and without impacting negatively on production rates.
RoM production from Vanggatfontein totalled 1.5-million tonnes during the second and third quarters of the financial year. This was equivalent to three-million tonnes a year RoM on an annualised basis.
Combined output from Intibane and Wescoal's share of the Khanyisa complex was around 1.5-million tonnes on an annualised basis.
"The combined group is now better positioned to meet increased demand, both from Eskom, as well as from other domestic and export customers, which have grown noticeably as a contributor segment. This also reduces our concentration and dependency risk to a greater extent," Sulaiman added.
Meanwhile, Wescoal said it would continue to focus on developing the Moabsvelden resource, adjacent to Vanggatfontein, representing a significant organic growth option for the group.
Study work on the Moabsvelden project remains on track to be completed in the coming weeks. Preliminary results confirmed that Moabsvelden represented a significant value-enhancing opportunity.
"We expect to produce between 1.5-million and two-million tonnes a year of additional RoM from the Moabsvelden project. This will result in us comfortably exceeding our eight-million-tonne-a-year overall production objective," Sulaiman said.