Coal of Africa gets into production

COAL of Africa became a notable thermal coal producer in the March quarter after completing its acquisition of South African company NuCoal Mining and its Woestalleen colliery on Australia Day.
Coal of Africa gets into production Coal of Africa gets into production Coal of Africa gets into production Coal of Africa gets into production Coal of Africa gets into production


Blair Price

The colliery was producing 2.5 million tonnes per annum of domestic and export thermal coal using two beneficiation plants with a 350,000t per month run-of-mine coal capacity.


In the recent quarter, Woestalleen produced 1.18Mt of ROM coal with 0.76Mt trucked for processing and the remainder sold unprocessed.


Of the processed product, Coal of Africa sold 0.54Mt during the quarter and exported through either Richards Bay or the Matola Terminal.


Meanwhile, the company’s Mooiplaats colliery started getting into its “export quality” bituminous thermal coal seam.


In moving from lean to bituminous coal, the company is seeing major improvements in roof and floor conditions and an associated reduction in mining costs.


Mooiplaats produced 84,067t of thermal coal from its processing plant and 14,897t of a lower-grade middlings product in the recent quarter.


With the first shipment of coal loaded in January, Coal of Africa exported 0.13Mt of Mooiplaats’ lean and export-quality thermal coal by the end of March.


In February, the company gained full ownership of the Vele open cut project and the first phase development aims to build a modular coal-processing plant to produce 1Mtpa of coking coal.


Coal of Africa said the designs to double the capacity, if required, were well advanced.


The second phase of the project is aiming for 5Mtpa of saleable coking coal but a start date will be determined by demand.


The company is in negotiations for a formal offtake agreement with the South African division of ArcelorMittal.


Coal of Africa expects the steelmaker to purchase the bulk of Vele’s phase one output.


Vele exploration in the quarter consisted of 20 holes covering 2000m in the planned east pit.


At its Makhado coking coal project in the Soutpansberg coal field, 38 holes were drilled for 2600m.


Coal of Africa is envisioning a modular wash plant similar to Vele’s for the project.


Preparations are underway for extracting a bulk sample of 19,100t of ROM coal for analysis at the company’s laboratory in Polokwane in the Limpopo province.


Coal of Africa managing director Simon Farrell said construction of Vele is expected to be complete in the September quarter, soon followed by coking coal sales.


“Furthermore, the completion of the acquisition of NuCoal’s Woestalleen assets and the mining of thermal coal at the Mooiplaats colliery ensures that the company is positioned to sell significant quantities of coal into the improving international and domestic coal markets,” he said.


The company entered into a 12-month, $US20 million unsecured revolving loan facility with JP Morgan Chase during the quarter.


The interest rate is payable at the LIBOR rate plus 3% and other fees.


Coal of Africa reported it had fully drawn the facility by the end of March.


Shares in the company were down 2.8% to $2.43 this morning.