The Australian-listed company submitted its application for a New Order Mining Right in 2010, with the South African Department of Mineral Resources approving its application this month.

Continental CEO Don Turvey said the company was delighted.

“The granting of the mining right for our De Wittekrans coal project represents a significant milestone for the project and the company ahead of taking the project into production over the next 12 months,” Turvey said.

De Wittekrans is about 45km north of Continental’s operating Ferreira and Penumbra mines.

The company completed its preliminary optimization work on a 2011 feasibility study during the first half of the year. It confirmed potential to enhance project returns by utilizing existing coal wash plants and rail sidings in the vicinity.

The optimization work identified an opportunity to develop De Wittekrans as both an opencast and underground thermal coal mining operation – supplying domestic and international markets over an initial 30-year life.

Annual production of 3.6 million tons per annum is expected after an initial build-up phase.

The optimization studies determined a phased development of the project with an initial seven-year opencast mining operation. The underground development was proposed to start in the third production year, with access from the highwall.

Underground mining in a conventional board-and-pillar operation is planned, with six continuous miner sections.

Continental submitted its application for an integrated water use licence approval in Q4 2012. It expects approval in Q1 2014.

As previously announced, the company anticipates a development decision for De Wittekrans to be made by the end of the year.

De Wittekrans is expected to be the company’s fourth producing mine. When developed, it has potential to double the annual ROM production of the company, as well as export and domestic thermal coal sales.