Rail hitch a setback for ResGen

RESOURCE Generation says the start-up date for its Boikarabelo coal mine in South Africa has been pushed back because the country’s rail freight operator has failed to commit to a haulage contract.
Rail hitch a setback for ResGen Rail hitch a setback for ResGen Rail hitch a setback for ResGen Rail hitch a setback for ResGen Rail hitch a setback for ResGen

The Boikarabelo coal project near Botswana, map courtesy of ResGen.

Lauren Barrett

The mine was predicted to be in operation by late 2013 but has been stalled to 2014 because no rail haulage contract has been finalised.

Resource Generation managing director Paul Jury said Transnet Freight Rail’s unwillingness to commit to a contract was a disappointment.

“The reluctance of TFR’s task team to commit to a rail haulage contract will delay the mine’s initial production until the first half of 2014, assuming an acceptable contract is agreed by the end of 2011 and funding is fully obtained,” Jury said.

Jury said Resource Generation had $25 million cash available after it sold its Tasmanian tenements last week, which would ensure the company’s operations continue in to the future.

Resource Generation has finalised engineering designs for the mine, which will enable it to fast-track construction once funding is secured.

However the project funding is conditional on the rail haulage contract.

Resource Generation has taken the matter to Transnet’s group chief executive in an attempt to get the rail haulage contract approved.

Located in the Waterberg region of South Africa, the Boikarabelo mine holds coal reserves of 744.8 million tonnes of coal with production tipped at around 40Mt of run-of-mine coal.

Resource Generation also intends to install its own powered station at the mine site to supply power for mining operations.

The cost of the power station is estimated at $100 million, part of a total $750 million for the development of Boikarabelo.

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