Johannesburg, South Africa — MININGREVIEW.COM — 18 June 2010
South African diversified miner Exxaro has announced that it started today with construction of its Grootegeluk mine expansion project, which is expected to supply coal to power utility Eskom from 2012.
Revealing this in a statement issued here, the company said the expansion project was meant to feed Eskom’s new 4 800 megawatt Medupi power plant, using an average of 14.6 million tonnes of coal per year over a period of 40 years.
“We are on time, within budget and our team is successfully meeting all aspects of the project scope,” Exxaro CEO Sipho Nkosi said in a statement.
Eskom has said it is confident of being able to meet this year’s power demand, including during the soccer World Cup, but sees a tight power supply from 2011-2012 unless new capacity is brought on stream.
The Medupi plant is the utility’s first new power plant in two decades, with the first of six 800 MW units expected to be commissioned by April 2012. Exxaro said full coal production from the R9.5 billion Grootegeluk project was expected from 2015. Major supply contracts for the project would be completed by July.
The company, which has awarded most of the long-lead-time contracts to external contractors, said the contracts included the supply of stackers and reclaimers, as well as the in-pit crushing system.
“We expect to spend about R4.5 billion of the total capital cost by the end of May 2012, and to date we have committed R1.38 billion and spent R505 million on the project. Most of the required funding arrangements are in place,” Nkosi added.
Exxaro previously said it had signed a definite agreement with Eskom to supply coal for the Medupi power plant.
Exxaro also hopes to use coal from its new Thabametsi mine, now in the pre-feasibility stage, to supply four independent power producers which may soon be included in the national energy plan. Supply deals for that have been agreed in principle.