Name and Location
New Largo coal mine project, Mpumalanga, South Africa.

Client
New Largo is owned by Anglo American Inyosi Coal, a black economic–empowerment (BEE) company, held by Anglo American (73%) and the Inyosi Consortium (27%).

Project Description
New Largo is planned to be an opencast mine in the Witbank area and is expected to produce 11-million tonnes a year of thermal coal to supply Eskom’s 4 800 MW Kusile power station, which is currently under construction.

The project will include a conveyor from Anglo American Inyosi Coal’s Phola processing plant to Kusile.

Key mining and associated amenities planned for New Largo include the opencast mine pit; draglines; crushing plants; trucks and large electric shovels; conveyor belts and tips; coal stockpiles; access roads; haul roads; overburden disposal facilities; stormwater and process water management services, with pollution control and balancing dams; a water treatment unit to treat water pumped from the old underground mine workings and contaminated water from the proposed new operations; power lines; and substations.

Value
Not stated.

Duration
Not stated.

Latest Developments
The 11-million-tonne-a-year New Largo project has reached the feasibility stage and engagement with Eskom to finalise the coal supply agreements is ongoing.

Eskom claims that discussions are back on track with Anglo American regarding a coal-supply contract with the proposed New Largo colliery, following an earlier breakdown in the process.

A “disconnect” arose despite chairperson Zola Tsotsi and interim CEO Collin Matjila having travelled to London to discuss progress with Anglo chairperson Sir John Parker.

Following that interaction, Eskom was convinced that there was “concurrence” on the approach that should be taken. But “for reasons not known to us [Eskom]” Anglo’s management adopted a different stance in subsequent negotiations.

This precipitated further high-level engagement with Anglo CEO Mark Cutifani to put the process back on track.

Matjila has stressed that, in the interim, coal contracts have been struck with four other collieries to shore up supply for Kusile’s commissioning. The 800 MW Kusile Unit 1 is scheduled for grid synchronisation by the end of 2015, with the subsequent five units to be introduced between 2016 and 2020.

Matjila says there has been a marked improvement in the process since Cutifani’s intervention and that a memorandum of understanding has been crafted and should be “finalised quite soon”.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The project has not yet been approved.

Contact Details for Project Information
Anglo American media relations, Hulisani Rasivhaga, tel +27 11 638 9811 or email Hulisani.Rasivhaga@angloamerican.com.