HomeMagazine ArticlesMoabsvelden brings Keaton Energy closer to mid-tier producer goal

Moabsvelden brings Keaton Energy closer to mid-tier producer goal

Bringing Moabsvelden into production remains Keaton Energy’s short-term growth priority” Mandi Glad

JSE-listed coal junior Keaton Energy Holdings Limited’s (Keaton) 74%-owned Moabsvelden thermal coal asset in Mpumalanga represents a significant opportunity for Keaton to easily grow its Delmas footprint. The upcoming project has immediate access to available processing capacity, infrastructure and management at Keaton’s nearby flagship Vanggatfontein operation, thus improving returns and reducing development capital requirement in light of the tough times within the coal market, writes CHANTELLE KOTZE.

The Witbank coal fields assets

Keaton CEO Mandi Glad says that bringing its Moabsvelden asset into production remains the company’s short-term growth priority.

Moabsvelden became a part of Keaton’s asset portfolio when the company acquired ASX-listed Xceed Resources Limited (Xceed) in February 2014. The rationale behind the acquisition of Xceed was the ultimate integration of Moabsvelden into the greater Vanggatfontein complex, as a result of the close proximity to one another, explains Glad.

As a result, Keaton plans to develop Moabsvelden as a remote pit of the Vanggatfontein operation. Although a mining right had already been granted to Moabsvelden (included in the acquisition), Keaton has amended the already-granted regulatory approvals as their development strategy and operating model diff ers somewhat to that of Xceed’s. Subsequently, the initiation of construction at Moabsvelden and its integration into Vanggatfontein awaits the granting of a water-use licence and the conclusion of a coal supply agreement (CSA) with state-owned power utility Eskom, to which the majority of its coal will be supplied.

“We have been driving the granting of the water-use licence and expect it to be awarded as soon as the third quarter this year. We are communicating with the Department of Water Aff airs on a regular basis and several site visits have already taken place,” says Glad, adding that the CSA negotiations with Eskom are also progressing well.

Keaton is actively investigating the most strategic road to achieving Eskom’s 50+1 B-BBEE ownership requirements. “We have put in place a two-phase plan, which will hopefully enable us to qualify as a supplier under Eskom’s new terms within the next 18 to 24 months. Phase 1 of our plan will be implemented…

Click here to read the full article on our digital platform.