JOHANNESBURG (miningweekly.com) – Construction activities at ASX- and JSE-listed Resource Generation’s (Resgen’s) Boikarabelo mine were making good progress with initial activities, including the establishment of site infrastructure, roadworks and water and power connections.

The company started construction at the mine, in the Waterberg, in mid-February.

Together with the engineering, procurement and construction management providers for the construction of the mine, tenders have been issued for longer lead-time items and packages for the early stages of construction, Resgen noted on Wednesday.

Aveng E+PC was assisting the company with the preparation plant designs and associated tenders, while RSV Enco was assisting with the infrastructure designs and associated tenders, including for the mobile equipment, which would be released shortly.

Resgen had secured a third export coal offtake contract with the Noble Group for the supply of 2.5-million tonnes of coal over a five-year period.

The coal producer had also entered into an exclusive supply chain management and marketing agreement with Noble under which Noble would manage the supply chain and marketing of Boikarabelo’s domestic and export coal sales for 35 years.

Additional offtake agreements to supply thermal coal to Indian customers and a global trader had previously been locked down.

Further, the diversified commodities trading company had entered into a strategic partnership, which would see it providing Resgen with a $123-million loan facility in exchange for a 7.5% shareholding in the coal company for 40c a share.

This loan facility was in addition to a $20-million secured debenture issued to Noble in January.

Funding would be undertaken in stages and included equipment finance and the use of Noble’s debt facility as a platform to continue securing project funding.

Stage 1 of the development at Boikarabelo, where there were probable reserves of 744.8-million tonnes of coal on 35% of the tenements under the company’s control, targetted saleable coal production of six-million tonnes a year.

Key achievements, to date, included obtaining a 30-year mining right, life-of-mine development consent for construction of the mine and rail link to the existing network, as well as the approval of an integrated water-use licence.

In addition, a rail haulage contract with Transnet with confirmed allocation to meet export and domestic sales requirements for Stage 1 of operations had been secured, along with a port access contract sufficient for Stage 1 export requirements.

Sufficient power supply had also been arranged for the Stage 1 operation.