JOHANNESBURG (miningweekly.com) – One of South Africa’s largest and foremost black-empowered mining companies, Exxaro Resources, is implementing a five-year, R20-billion capital expenditure (capex) programme on coal mining projects in Limpopo and Mpumalanga.

The black-led JSE-listed company has seven coal projects under way – four in Limpopo’s Waterberg region and three in Mpumalanga. (See attached diagram).

The largest capital project is the R4.8-billion, 1.7-million-tonne-a-year GG6 project at Grootegeluk, in the Waterberg, where first production of semisoft coking coal is expected in the company’s 2020 financial year.

The project programme will provide the company – which earlier this month signed a ten-year coal export transportation agreement with State rail enterprise Transnet to increase coal volumes from the Waterberg to Richards Bay Coal Terminal – with additional export volumes and more power station coal.

“This is on a take-or-pay,” Exxaro CEO Mxolisi Mgojo told Mining Weekly Online.

The take-or-pay arrangement commits Exxaro to having the coal available at the required time and Transnet to providing the necessary rail infrastructure to transport that coal.

In this regard, Exxaro is spending R1.3-billion on 12-million-tonnes-a-year rapid loadout station, which is scheduled to be operational in the Waterberg in the first half of 2019.

This will enable Exxaro to load 200-wagon trains within three to four hours, Mgojo outlined Mining Weekly Online.

The ten-year agreement allows for the transportation of 7.8-million tonnes of export coal a year, of which three-million tonnes will arise out of the Waterberg once all the region’s projects have ramped up.

The signing of the contract with Transnet CEO Siyabonga Gama follows the completion of first phase in the Waterberg expansion programme of 2016, which included a 1.8 km passing loop that facilitates the crossing of 100-wagon trains without disrupting other rail operations on the line.

In Mpumalanga, Exxaro is executing the R3.3-billion, 2.7-million-tonne-a-year Belfast project, where production of thermal coal is expected to begin in the first half of 2020.

Again in the Waterberg, capital of R2.8-billion is earmarked for the development of the first phase of the 3.9-million-ton-a-year Thabametsi project, where it is continuing to take precautionary steps to protect its mining right in the event of the associated Marubeni independent power producer coal-fired power station being delayed or not eventuating.

“Early works are being done now just to protect the mining right, but also under consideration is arriving at a business case for mining, in case we’re without a power station there, and that work is being done right now,” Mgojo told Mining Weekly Online.

Already being commissioned is the second phase of the R600-million Grootegeluk discard inpit project in the Waterberg, while in Mpumalanga, the R500-million, 2.7-million-tonne-a-year life extension project at Leeuwpan is expected to produce its first thermal coal in the second half of next year.

The commencement of the construction of the R1.8-billion Matla Mine 1 relocation project in Mpumalanga is pending approval from State electricity utility Eskom. 

“There’s also quite a bit of sustaining capital that’s going to go in at all the mines and we’re also looking at ECC, which is the old Total asset,” Mgojo added to Mining Weekly Online.