Dineo Faku
AFTER acquiring assets from Rio Tinto last year, Coal of Africa Limited’s (CoAL’s) reserves in the Soutpansberg coal field area increased by 429 percent to 8 billion tons from 1.5 billion tons, the mining company said yesterday
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Kamani Moodley, an analyst at Afrifocus Securities, said that the increase of reserves at CoAL solidified its space in coking coal. She said CoAL had significant mining rights for coking coal in the area but it was focused on developing other projects.
“CoAL is looking at developing its Vele and Makhado projects… delivering on the target of 10 million to 15 million tons a year is far off,” she said. The firm has a target of producing between 10 million and 15 million tons in the next decade.
CoAL is ramping up output at Vele, next to the Mapungubwe National Park and World Heritage Site in Limpopo.
The company signed a memorandum of agreement last year with the Department of Environmental Affairs and the SA National Parks to ensure the conservation of the heritage site.
Makhado, which will produce semi-hard coking coal in Limpopo’s Soutpansberg field, has a resource of 879 million tons of coal.
CoAL said last year that it had an entered into an agreement with a subsidiary of JSE-listed Exxaro Resources in which Exxaro had been granted an option to acquire 30 percent of the Makhado project.
Moodley said CoAL was focusing on supplying ArcelorMittal South Africa before expanding sales to potential international customers.
The Greater Soutpansberg comprises nine coking and thermal coal assets including several that were acquired from Rio Tinto Minerals Development and Kwezi Mining.
CoAL first announced its intention in November 2010 to buy the Chapudi project as well as related exploration properties from Rio Tinto and Kwezi . Regulatory approvals were received from the Department of Mineral Resources last month.
CoAL said total tonnage in situ increased by 404 percent to 6.443 billion tons from 1.279 billion tons, and mineable tons had risen by 209 percent to 2 billion tons.
Chief executive John Wallington said yesterday that CoAL started the exploration programmes and technical work required to evaluate the potential of these assets in the Greater Soutpansberg area.
“The additional prospecting rights represent an important development in the evolution of Coal of Africa and its partner, Rothe Investments, by consolidating the potential coking and thermal coal assets in the Soutpansberg coalfield,” Wallington said.
Coal of Africa’s stock advanced 4.9 percent to close at R4.88 yesterday.