London, England — MININGREVIEW.COM — 02 December 2010 – Coal of Africa says it is in talks with partners in a move to help develop the Chapudi coal project and other neighbouring South African assets acquired from Rio Tinto.
“We are talking to a number of parties as this is such a big scale,” chief executive John Wallington told Reuters here on the sidelines of the Mines and Money conference.
At the beginning of the week, the company revealed that it had agreed to buy Rio Tinto’s coal assets in South Africa for US$75 million (R525 million), and that it believed the acquisition would boost its application for New Order Mining Rights for the neighbouring Makhado coking coal project.
“We are looking at a reasonable amount of capital expenditure next year to prove up one or two of these areas,” Wallington said. Chapudi contains an estimated 1.04 billion tonnes of coal, based on 2004 estimates from Rio Tinto, with about 70% on a less certain inferred resource category.
The company plans to lodge its New Order Mining Right for Makhado next week and hopes to start production there by mid-2013.
Coal of Africa said it did not expect environmental issues which affected its Vele Colliery and threatened its Mooiplaats mine with closure this year, to cause similar problems for Makhado. .
Construction work at Vele has been suspended amid concerns that it might increase pollution at Mapungubwe, a World Heritage Site, located near the Kruger National Park.
Wallington said he was more confident than he had ever been that construction work at Vele would be able to go ahead, and he hoped to get approval to continue the work in the next couple of months.
He added that Coal of Africa had postponed a planned move up to London’s main market from the junior Alternative Investment Market because of the problems at Vele, but emphasised that the move was still planned.