Johannesburg, South Africa — MININGREVIEW.COM — 23 July 2010 – JSE- and AIM-listed multi-commodity company Petmin Limited has announced that its board has approved capital expenditure of R120 million for the construction of the second coal processing plant at its Somkhele mine in KwaZulu-Natal.
A statement issued here confirmed that construction of the second plant would double current production capacity to approximately 1.1 million sales tonnes a year. It was anticipated that the plant would be funded with a combination of debt (not more than 65%) and the company’s own cash resources. Petmin’s cash resources were in excess of R230 million, and the company’s debt gearing ratio was less than 10%.
The statement added that the plant would be commissioned by 31 December 2011. Somkhele, which lies 85km to the north-east of Richards Bay, is the second largest producer of high quality metallurgical anthracite in South Africa.
The additional capacity of approximately 535 000 saleable tonnes per annum would position Somkhele as the largest producer of metallurgical anthracite in the country, it said.
Petmin executive chairman Ian Cockerill commented: “This significant organic expansion at Somkhele is an exciting step in Petmin’s growth strategy, reflecting both our confidence in this operation’s ability to deliver increased production, and our analysis of the global market.”
Somkhele is currently mining on approximately 1 400 hectares and exploring on a further 23 000 hectares, with SAMREC-compliant reserves and resources of 51.2 million tonnes. Following an accelerated exploration drilling programme completed in June 2009, additional resources of 24 million tonnes were delineated in the Luhlanga, KwaQubuka and Emalehlene coal deposits, which are in close proximity to the current processing plant.
The mine, which supplies both local and overseas markets, has a dedicated export facility of 600 000 tonnes per annum at the Richards Bay dry bulk terminal, and is well positioned to grow its export market.