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Kangala thermal coal project, South Africa

11th April 2014

  

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Name and Location
Kangala thermal coal project, Mpumalanga, South Africa.

Client
Universal Coal.

Project Description
Kangala has proven reserves of 20.8-million tonnes of thermal coal. It comprises three properties – Wolvenfontein, Middelbult and Modderfontein.

Saleable coal tonnages averaging 2.1-million tonnes a year will be achieved from a 2.4-million-tonne-a-year run-of-mine production rate over the life of the mine, which is forecast at 8.5 years.

Value
A$46.8-million. All funding for the project has been secured.

Duration
Production at Kangala started in February 2014.

Latest Developments
Universal Coal has sold its first coal from its Kangala mine.

The miner has processed and stockpiled the run-of-mine (RoM) coal mined from Kangala since February. Coal sales to State-owned power utility Eskom have started.

Under the terms of the original coal sales agreement, Universal will provide Eskom with sales from Kangala for the next eight years, with an extension in place for 16 years.

Remaining production will target the more lucrative export markets through a 100 000 t/y offtake agreement with South African coal producer Exxaro Resources.

First export sales are on track to start by July 2014 and Universal has secured export allocation through Richards Bay Coal Terminal, in KwaZulu-Natal.

The company reports that Kangala is ramping up towards its nameplate capacity and is expected to reach this target by the third quarter of 2014.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Universal reports that the A$46.8-million project remains on budget and is set to deliver its first production by February.

Contact Details for Project Information
Universal Coal, tel +27 12 460 0805, fax +27 12 460 2417 or email info@universalcoal.co.za.

Edited by Creamer Media Reporter

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