With domestic sales of 2 million tons per annum to African utility Eskom and export allocation through Richards Bay coal terminal already secured, the company’s first operational coal mine is set to begin production.

Universal said the coal to be provided to Exxaro was a “higher quality thermal coal product” than that going to Eskom.

Box-cut development at the mine commenced in early July and first run of mine coal delivery is expected in October.

Initial coal from the box cut will be used for the base of the stockpiles to prevent contamination at a later stage.

Remaining box-cut coal will be used to commission the plant in December.

Site office and facilities have been established and are operational, while mine construction has started with topsoil removal underway.

Construction of the processing plant terrace onsite has commenced and will be completed by the end of July.

Offsite construction of the plant is still underway, with offsite plant completion, including trial erection and dry testing of the plant, expected by the end of August.

Recruitment is progressing well and on-the-job training has commenced for many of the permanent mining staff.

Having previously fully funded the equity component of the mine with partner Mountain

Rush, Universal is planning the first drawdown on the 300 million rand ($US30 million) facility later this month.

Further drawdowns will be made on a regular basis as required over the remaining capital expenditure development program.

Kangala is located in South Africa’s Witbank coalfields and is expected to produce an initial 2.1Mtpa.