Coal of Africa will invest R4 billion ($391 million) towards construction of a coal mine to make it the largest hard coking coal producer in South Africa.
According to Coal of Africa, Chairman David Brown: “One of the benefits about this project is the positioning in terms of hard coking coal properties and qualities that we’ll be able to produce from it. It will propel us into the largest hard coking coal producer in South Africa once this project is up and running.”
Brown said the mine recently announced completion of a feasibility study on the project with projected mineable coal availability reaching up to 344.8 million tonnes. Construction of the Makhado project, in the Limpopo province, is expected to commence soon despite significantly weaker coal markets in the last 12 months.
“I think it is quite clearly the coal market and the whole commodity sector has obviously taken a beating in the last 12 months so without a doubt commodity prices are substantially lower than where they were 12-15 month ago,” Brown added.
Brown said the colliery is driven towards becoming a significant global hard coking coal and thermal coal producer. Expansion plans are already on the pipeline as Brown pointed out that they intend to roll at least two more mines to become the leading producers in South Africa.
“I think the exciting thing for us is this is just the first step. We’ll probably have another two or three of these size-projects which we’re going to roll out on an on-going basis,” he added.
Coal of Africa Limited (CoAL) is an emerging developer and producer of high-quality thermal and coking coal. According to Makhado’s feasibility study CoAL envisages product to be sold domestically and exported through CoAL’s allocation at Terminal de Carvão da Matola (TCM) in Maputo, Mozambique and also plans to have a freight advantage in serving the South African domestic market compared to imported coking coals. The colliery is positioning itself towards becoming a major supplier of thermal coal to the country’s electrical authority, Eskom.