From Creamer Media in Johannesburg, this is the Real Economy Report.

Sashnee Moodley:

Coal mining company Kangra has extended the life of its operations by opening up a new adit, which provides access to new underground coal reserves. Darren Parker tells us more.

Darren Parker:

Kangra – a subsidiary of mining investment group Menar – started mining first coal from its new underground Udumo adit on February 9. The new adit will provide access to the Kusipongo coal resource, west of Kangra’s other mining operations. The Kusipongo resource boasts about 41.9-million tons of coal and could extend the life-of-mine by more than 20 years.

The first cut of coal was done using a Komatsu Joy continuous miner operated by Kangra GM Pierre Louw, who said the extension was a relief to all those involved with operation, which includes about 549 employees, including contractors.

Kangra GM Pierre Louw:

Darren Parker:

The Udumo adit, which had a capital budget of R153.6-million, was previously known as Twyfelhoek but was renamed to Udumo – which means “honour” in isiZulu – to better reflect the spirit and culture of the surrounding Saul Mkhizeville community in Mpumalanga.

The Kusipongo resource contains a mixture of both low- and high-volatility coal, which will be mined from three sections using a bord-and-pillar method.

The key infrastructure needed to start mining the new adit is already in place, with additional infrastructure to be rolled out over the coming months.

Kangra GM Pierre Louw:

Darren Parker:

Once mined, the coal will be either trucked or conveyed by overland conveyor to the Maquasa East shaft. From there, it will be washed.

Kangra GM Pierre Louw:

Darren Parker:

After washing, the coal product will be trucked to the Panbult Rail Siding about 30 km from the mine.

Most of the product will then transported by rail to the Richards Bay Coal Terminal in KwaZulu-Natal, in which Kangra holds an interest.

Kangra GM Pierre Louw:

Darren Parker:

Kangra’s next development of the Kusipongo reserves is the planned Balgarthan A adit, which will have one underground section.

The updated capital budget estimated for Balgarthan A is R112.6-million. The Balgarthan adit will be located about 25 km south-west of the Udomo adit. Louw said the company was targeting the third quarter for the start of construction on the new adit.

Kangra is targeting a production rate of 1.44-million tons a year run-of-mine from its new underground mining sections once Belgarthan A shaft is commissioned.

Meanwhile, 360 000 t/y run-of-mine will be mined from the available opencast areas for the duration of the mine’s life.

In addition to the new underground development, Kangra started mining the Block C opencast section, which will be ramped up to about 40 000 t/m of run-of-mine coal now that the Udumo adit is established.

Kangra GM Pierre Louw:

Darren Parker:

Kangra also invested in new and reconditioned mining equipment to the value of R45-million to mine the Kusipongo reserves.

Kangra GM Pierre Louw:

Darren Parker:

To enable the development of the Udumo adit and the Block C opencast section, agreements had to be reached to relocate affected families living within 500 m. Kangra is in the process of building the families new homes using local contractors.

Kangra GM Pierre Louw:

Darren Parker:

As part of Kangra’s R20-million social and labour plan investment commitments, a project is planned for this quarter to supply water to the nearby Donkerhoek community.

Sashnee Moodley:

That’s Creamer Media’s Real Economy Report. Join us again next week for more news and insight into South Africa’s real economy.