HomeEnergy MineralsNew Largo project moving ahead

New Largo project moving ahead

Night-time operations
in the open pit at
Anglo Coal’s New
Vaal colliery
Johannesburg, South Africa — MININGREVIEW.COM — 08 June 2009 – Anglo American Plc’s South African coal unit – Anglo Coal – plans to complete a feasibility study on its New Largo mine by mid-2010, so that it can supply Eskom Holdings Limited’s new Kusile power plant.
Revealing this in an address here, Anglo Coal South Africa strategy manager Ian Hall explained that the company wished to secure a mining permit next year, and to make an actual start with the project in 2011. “Anglo and Eskom have yet to agree on coal prices,” he added.

The first unit of the Kusile power station is scheduled to start in the third quarter of 2012. “Clearly the coal has to happen before then,” Hall said, “so it’s already fairly tight.”

Bloomberg News reports that Eskom is spending about R385 billion over the next five years building mainly coal-fired plants, after a shortage last year caused rolling blackouts in South Africa. Anglo American – which accounts for about a quarter of South Africa’s coal output – supplied 36.1 million metric tonnes to Eskom last year.

“New Largo will contribute quite considerably to Anglo Coal South Africa’s plan to increase production over the next five to 10 years,” Hall said. The unit produces about 60% of Anglo Coal’s annual production of 100 million tons.

In February Anglo American revealed that New Largo might cost US$660 million (R5.3 billion) and produce 14.7 million tonnes a year by 2015.