Located in the Witbank coalfields, 100km northeast of Johannesburg, the first phase of the NCC project is scheduled to be fully commissioned later this year.

At full capacity, this will produce 2 million tonnes of coal per annum for high-end domestic markets. A long-term Coal Sales Agreement is being negotiated with both power and metallurgical off-takers for the use of NCC coal.

With reserves of 40.5 million tonnes, the mine is expected to have a life well of more than 20 years.

The financing facility will also be used to refinance the debt component of Universal Coal’s Kangala Colliery.

Universal Coal CEO Tony Weber said that since that mine had reached steady state operations, existing project finance facilities were being replaced with more favourable and flexible corporate debt facilities.

“We are entering an exciting growth phase,” he said.

“Once we reach steady state production at NCC, the company’s net production will have doubled. Further, by securing corporate debt financing on more favourable terms than project financing, Universal Coal’s net value will be significantly enhanced, and its ability to bring long-life, multi-product coal operations to full production demonstrated.”

Weber said ministerial approvals for NCC were expected early during the next quarter pending certain rectifications required by the Department of Mineral Resources.

Universal Coal has completed a bankable feasibility study for the initial phase of the NCC project, which has been approved by the board subject to finalisation of the CSA.

Project development will continue as scheduled, with on-site mining activities to start once the CSA is concluded.

The opencast tender process for mining at Roodekop has been completed and a preferred contractor nominated.

Contractual agreements are being drafted.

Tender documents for the construction of processing plants have been released to pre-selected parties, with adjudication and selection processes underway.