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Intibane to produce coal from June

16 Apr 2013

Wescoal said on Monday (15 April) it would start mining at Intibane colliery in the Witbank coal field in June after it's water-use licence was granted by the Department of Environmental and Water Affairs. Wescoal is hoping to produce about 1,8m tons of coal from the mine a year.

Initially‚ the company expected to start production at the end of last year‚ but this date had to be changed. "The delays were solely the result of the water-use licence. We won't start without it‚" Wescoal chief executive Andre Boje said.

Intibane forms part of the Vlakvarkfontein property in the Witbank coal fields that Wescoal plans to develop.

According to Boje‚ Wescoal spent R49.4m on mine development at Intibane and the venture is forecast to deliver 1.88m tons of coal annually.

The mine has a supply agreement with Eskom to supply the utility with coal for the next three years as part of a R700m deal.

Wescoal and its black economic empowerment partners Water Portion Property Investments - which holds a 34.9% stake in the company - have received export allocations for the new Quattro programme at the Richards Bay Coal Terminal Company‚ that allows junior coal miners to export up to 4m tons of coal a year.

"We have received notification that we will be participants in the system‚ and we plan to ship 200‚000 tons coal a year from our own production‚" said Boje.

He said the Khanyisa open-cast mine was nearing the end of its life-of-mine‚ and underground operations were scheduled to start early next year‚ which was expected to extend its life by an three years and add 600‚000 tons a year to the mine's total output.

Wescoal is in the process of finalising its acquisition of the Elandspruit properties adjacent to Intibane from Xstrata.

In terms of this deal it will buy the properties for R93.8m‚ in exchange for the R81.1m sale of its Vlaklaagte properties to Xstrata. The Vlaklaagte properties are located near Xstrata's existing mining operations.

In February the company advised shareholders that the deadline to complete the deal had been extended to the end of April‚ as it waited for ministerial consent for the transfer of the assets‚ as well as the issue of a mining right for Elandspruit.

Boje said the company was also assessing whether it would be able to mine the targeted four-million tons a year by 2016‚ once it completed its expansion and development programmes.

"We are busy conducting pre-feasibility studies‚ and it will all depend on how much we'll be able to mine out of Elandspruit‚" Boje said.

Source: I-Net Bridge

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