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
Electricity utility Eskom says it and Anglo American have concluded a memorandum of understanding (MoU) that maps out the process to be followed to enable the parties to conclude a final coal-supply contract for the Kusile power station, which is being built in Mpumalanga.

The MoU focuses on the New Largo colliery.

The MoU emerged following a high-level intervention between Eskom and Anglo executives in London earlier this year – this after relations broke down, reportedly as a result of Eskom’s 51% black economic-empowerment ownership stipulations for the project.

Work is under way to iron out “technical issues” relating to the mine plan, which will inform the cost of the project and, in turn, the commercial terms of the eventual supply agreement.

Eskom executive for group capital Dan Marokane has confirmed that the initial 800 MW Kusile Unit 1, which is scheduled for grid synchronisation by the end of 2015 or early 2016, will receive coal from third-party suppliers.

Contracts have already been concluded with those suppliers, with the contracted coal being delivered to other power stations within the Eskom portfolio while work on Kusile continues.

Marokane says that teams are being remobilised in line with the MoU and that efforts will be made to claw back time that has been lost, while still ensuring that Eskom pays a fair price for the coal.

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.