Grootgeluk coal mine ‒ will supply Medupi power station

Johannesburg, South Africa --- MININGREVIEW.COM --- 22 November 2010 - Diversified South African-based resources group Exxaro Resources Limited (Exxaro) plans to move into iron ore next year to further diversify its portfolio, and has big ambitions for growth in its coal unit.

Company manager for growth Ernst Venter said Exxaro was targeting Africa and Australia for either buying an existing producer or partnering in an early-stage project.

“We are narrowing in on our targets. We hope that not later than June 2011 there will be a movement on that,” Venter said in an interview with Reuters. “The preference would be to buy up an existing producer or to get into an area where there is a lot of bulk-up potential,” he said, declining to give further details.

Reuters reports that Exxaro's main business has been coal, and that the company plans to raise its coal exports to up to 26Mtpa over the next decade from just over 6Mtpa to help feed a fast growing demand from power producers in Asia.

This expansion will depend, however, on the availability of rail links between the coal-rich Waterberg region and ports for export.

Exxaro is part of a consortium interested in developing a 1 500 km railway line to transport coal from Botswana to a port in Namibia, and may also assist with the expansion of a railway line leading to the coal export terminal at Richards Bay.

The company is also supplying coal to power plants operated by South African power utility Eskom. Its planned Grootegeluk mine expansion is due to supply 14.6Mtpa of coal to Eskom's new 4 800 MW Medupi plant from May 2012.

In addition, it is considering a new greenfields mine, which could supply between 6 and 16Mtpa of coal to new power plants operated by independent power producers.