Name and Location
Elandspruit multiproduct coal project, Mpumalanga, South Africa.

Client
Wescoal.

Project Description
The Elandspruit mining right contains five potentially mineable coal seams, which occur from suboutcrop to a maximum depth of about 70 m below surface.

All seams are near horizontal in formation and appear to be devoid of geological complexities, such as faulting or dolerite intrusions and, as a result, the mining approach is expected to be manageable within the parameters being planned.

A Phase 1 desktop planning study completed on the resource has indicated that production of about two-million tonnes a year is targetable over a 15-year mine life, at an average strip ratio of 2.3:1.0 (bank cubic metres waste:tonnes coal) for the combined seams.

Mine scheduling simulations also indicate that the grade of as-mined coal should be relatively consistent over the life-of-mine (LoM), with raw qualities averaging 21.14 MJ/kg calorific value, 30.0% ash, 21.5% volatile matter and 1.08% sulphur content on an air-dried, uncontaminated basis.

The desktop study findings suggest that the most attractive option, from several alternative production scenarios, envisaged the marketing of partially processed coal from the No 1 and No 2 lower seams as an Eskom-type product, with raw coal from the No 3 Seam and washed coal from the No 2 Upper and No 4 Lower Seams sold to the export/inland markets. Further work is required to test the feasibility of this scenario.

Laboratory exercises indicated that processing all mined coal for a 26 MJ/kg product could achieve an average theoretical yield of 50%. A range of processing alternatives, designed to deliver various sales options to the export, inland and Eskom markets, are being assessed by Wescoal. These may involve toll-treating the run-of-mine coal off site or upgrading the coal through a dedicated on-site facility.

At this stage of project evaluation, no coal reserves have been declared, as further work is required to develop a final LoM plan, which is required by the South African Mineral Resource Committee code.

Value
Not stated.

Duration
Not stated.

Latest Developments
Wescoal expects to produce first coal from its Elandspruit project in January next year, putting the company on track to meet its target of producing four-million tons of coal a year by 2016.

The JSE-listed miner acquired Elandspruit from miner Glencore for R93.8-million in August last year.

Wescoal CEO Andre Bojé has, however, cautioned that the Elandspruit mine’s start-up date depends on the water-use licence, for which it applied in November last year, being granted by August 31, as is expected.

“If the water-use licence [date] moves out, the whole project will move out, but we are looking forward to seeing coal from Elandspruit within the first quarter of next year,” he says.

In addition to the water-use licence, the company has also applied for environmental authorisations in terms of the National Environmental Management Act, and has concluded agreements to acquire the required surface rights.

“[Once the project comes on line] it will be a game-changer for Wescoal. We have a life-of-mine now of one-and-a-half years. The Khanyisa [and] Intibane extensions will give us another two to three years, but Elandspruit gives us 15 years,” says Bojé.

To ensure the quick start-up of Elandspruit, Wescoal has bought certain assets, including a coal processing plant, from coal miner Muhanga Mines for R42-million.

Bojé explains that building a new processing plant would have cost the company about R300-million and would not have been ready to operate as soon as Elandspruit started mining.

“The acquisition of [the] Muhanga plant gives Wescoal immediate access to a fully fledged beneficiation asset that is currently operational, has all the necessary regulatory approvals and extensive infrastructure to allow for a multiproduct operation while regulatory approvals are awaited for the Elandspruit site,” the coal miner stated.

The company’s board has approved future capital expenditure of R170-million for the commissioning of the Elandspruit colliery, including the acquisition of an existing plant, mine operational infrastructure, surface rights and production start-up costs.

Wescoal chairperson Robinson Ramaite has said he is confident that the company will have the finance in place to develop the project.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Wescoal, tel +27 11 954 2721 or fax +27 86 688 2009.