September 2016 represents a major milestone achievement for ASX-listed coal junior Universal Coal which saw the company move its 49% owned second mining operation – New Clydesdale Colliery (NCC) – into production. And while this has successfully enabled the company to fulfil its strategy of becoming a multi-mine coal producer for the domestic and export market, NCC is destined to grow quite substantially in the near-term future and nearly double the company’s mining production profile in 2017. LAURA CORNISH visited the mine to learn more about what lies in store for it.
The acquisition of NCC from coal major Exxaro in 2014 has started bearing fruit for Universal Coal – the coal handling and preparation plant (CHPP) has been largely recommissioned and is successfully washing and screening coal from Diepspruit underground coal mine which was included as part of the A$18.05 million acquisition.
Although the intention was originally focused on bringing Universal Coal’s NCC plant-adjacent Roodekop deposit into production first, the lengthy period necessary to acquire a coal supply agreement (CSA) with Eskom saw the company change direction. Thanks to a small and fl exible management structure, the decision to start mining at the underground operation – already developed by Exxaro – was quick and easy.
Once the coal is delivered by truck from the now operational and nearby underground Diepspruit mine, it is screened and washed in two of three separate plant modules at the NCC CHPP.
NCC general manager Charles Makgala explains that the plant, one of the oldest in the country, was first established as a crushing and screening operation in the 1950s after which it was expanded in modules. Today the three modules include a 90 tph HMS (heavy media separation) module which is due to be refurbished imminently, a 200 tph PCI (pulverised coal injection) which is used to wash the Diespruit coal and a 300 tph Module B operational plant which will be used to process the Roodekop opencast coal mine material down the line. A new slew conveyor system will also be added to the plant, and this will provide production flexibility (as is the case at the company’s Kangala coal operation situated in Delmas).
eMalahleni-based minerals processing company Ingwenya Minerals Processing was awarded the full contract in 2015 to not only refurbish the old CHPP but also to operate the plant as well.
The development of the NCC plantcontiguous Roodekop ore body is due to start – imminently. This is thanks to the finalisation of the CSA with Eskom which was signed on 7 November 2016. The contract held the key to securing the necessary cash, building the Roodekop mine as well as completing the refurbishment of the plant (including the installation of the slew conveyor system).
“We are now ready to develop our opencast mine and ramp up production at NCC quite signifi cantly,” Makgala highlights.
Roodekop will be an approximately 2.2 Mtpa ROM mine, delivering 1.2 Mtpa of coal to Eskom. Both Makgala and Universal Coal chief development engineer Kevin Donaldson have committed to delivering first coal from the mine within three months of development start-up – equating to April 2017. In combination with Diepspruit, this effectively doubles Universal Coal’s total production output to about 6 Mtpa (ROM). Kangala has over the 2016 year expanded its production and is currently delivering 3 Mtpa (ROM).
Roodekop is an attractive asset – its coal seam is situated below only 10 m of overburden (approximately) and as such can be developed quickly. Once the operation starts producing coal, it should take no longer than six months to reach full production after which it can continue to operate for 10 years. All the major contracts have been awarded, including contract mining, which will be undertaken by Trollope Mining Services. The company has been on standby to move onto site and will do so imminently.
Important to note, NCC and Roodekop each have their own mining right, environmental authorisation, integrated water use licence, waste licence, approved environmental management plan and social and labour plan. Work is underway to integrate the two projects into a single entity (NCC), which would enable the company to capitalise on synergies under a single licence. “We submitted an application to consolidate our environmental management plans in September this year,” notes NCC environmental manager Nandi Sibanyoni.
The entire NCC project (incorporating opencast and underground) has a JORC-compliant coal resource of 144.7 Mt (44.821 Mt is at Roodekop) of which 96.8 Mt is measured and 41.8 Mt indicated, which incorporates an untouched opencast deposit called Middeldrift and the potential advancement to underground mining for Roodekop. It also has a proven reserve of 29.3 Mt. Based on its resources, NCC can support a mine lifespan of 20+ years.
A company comprising a small but well-structured management team, like Universal Coal, has proven that quick decisions can have dramatic and positive impacts on the company. Although its original strategy to start mining at Roodekop initially changed this year, it did not deter the company from revising its plan to ensure it started generating income from its second NCC asset by exploring the possibility to mine from its underground ore body instead. This has positioned the company well to bring Roodekop on stream quickly now that its CSA has been finalised.
Universal Coal made the decision to start producing coal at Diepspruit in August 2016. The decline and ore body is situated about 8 km from the NCC CHPP. Within a month, two continuous miners had been brought to site and contract miner STA Coal Mining was producing coal. “It was an ideal solution to move the Diepspruit asset into production for the least amount of capital in order to start generating income,” says Makgala.
The mine comprises a decline, extensive underground development and two working sections each operating a continuous miner, three shuttle cars and a roof bolter. Now, three months since production start-up, Diepspuit is nearly operating at target nameplate capacity – delivering 900 000 tpa ROM from the lower 2-seam material. MRA