Johannesburg - Wescoal has delivered the “first coal” from its Elandspruit mine in Mpumalanga, it said in a statement to shareholders today.
JSE-listed Wescoal bought the rights to the mine from Xstrata about three years ago for R94 million, noting at the time that the purchase of the open cast resource was in line with its goal of securing high quality resources.
Elandspruit has an existing mining right with a resource of 30.5 million tons. Adding the mine to Wescoal’s portfolio would aid it in meeting its target of 4 million tons a year.
The sustainability of Wescoal’s mining operations would increase by 12 to 15 years and the company would strive to commence mining by late next year or early 2014, it said, it said in 2012. The deal was part of a mining rights swap which saw Wescoal transfer its Vlaklaagte mining right to Xstrata for R82 million.
Wescoal noted this morning the coal was delivered “as planned” and was “successfully processed at its nearby beneficiation plant”.
“The beneficiated product was in line with expectations and sales to customers in the domestic and export markets have commenced.”
Wescoal notes site establishment and project start- up activities were concluded within budget and without any safety incidents.
It says its mining division is on track to produce about three hundred and thirty five thousand tons of run of mine per month during the final quarter of the current financial year. This is equivalent to around four million tons of run of mine production on an annualised basis.
In the year to March, Wescoal turned over R1.7 billion, but warned the next 12 months would challenging as competition increases, load shedding impacts the trading business and the state of the steel sector in South Africa comes under pressure with already reduced orders for coal being experienced.
Wescoal’s main business is mining, processing, selling and supplying coal.
The miner funded the Elandspruit development through a R200 million facility from Investec Bank. Elandspruit is expected to produce 200 000 tons a month by the end of this year.
IOL