Dineo Faku
COAL of Africa Limited (CoAL) expected to resume operations at its Vele colliery this week, it said in a statement on Friday.
CoAL said limited operations had begun at the colliery after the mine was forced to shut after heavy flooding in Limpopo last month.
“Limited operations have recommenced at the colliery and production is targeted for the first week of February 2013,” the coal producer said.
CoAL reported a 58 percent drop in production at its Mooiplaats colliery in Mpumalanga, which was rocked by a strike last year. The colliery produced 113 384 tons in the December quarter from 274 943 tons in the previous quarter.
A restructuring of the Mooiplaats colliery is under way and a section 189 consultative process has started with unions, with retrenchments of workers expected.
CoAL posted an 83 percent boost in export coal sales in the quarter from the Motala terminal to 411 292 tons compared with the previous quarter.
It attributed the increase to improved demand, availability of rail capacity and a reduction of inventory build-up in the previous quarter.
In contrast coal sales to the domestic market declined 17.8 percent to 154 186 tons because of lower production, owing to strike action at the Mooiplaats unit.
Meanwhile, sales of middlings coal to Eskom increased 26 percent to 264 169 tons.
CoAL said deliveries in the previous quarter were held in abeyance pending the conclusion of the new off-take agreement after the quarter’s end.
The company received approval from regulatory authorities in Australia and China and CoAL shareholders for the $100 million (R884m) investment in the company by Beijing Haohua Energy Resource, a subsidiary of China’s Haohua Energy International.
CoAL chief executive John Wallington said Haohua Energy’s $100m investment was a significant milestone and would provide the funds for developing the company’s coking coal projects.
“It is anticipated that a portion of the funds will be used to complete the modifications to the Vele colliery processing plant to enable the simultaneous production of semi-soft coking and thermal middlings coal products.
“We expect the co-operation agreement with Haohua Energy International to be finalised during the current quarter,” Wallington said.
CoAL shares declined 2.46 percent to close at R3.17 on Friday.