HomeEnergy MineralsVele coal project will produce this year

Vele coal project will produce this year

CoAL chief geologist
Charles Mafiri showing
the wide-diameter cores
stored in a low-temperature
container at the Vele
Johannesburg, South Africa — MININGREVIEW.COM — 30 April 2010 – Emerging coal development and production company Coal of Africa Limited (CoAL) has announced that construction and pre-commissioning of the R450 million first phase of its Vele project in Limpopo is moving ahead on schedule, and that construction is expected to be completed early in Q3 of this year, followed soon afterwards by sales of coking coal.

Confirming this development here, CoAL managing director Simon Farrell said that the granting and execution of the new order mining right for Vele had been the final step which had triggered the move ahead with Vele.

The company’s quarterly results report confirmed that it was developing the Vele Project in two phases. Phase 1 would comprise the establishment of a modular coal processing plant with the ability to deliver an estimated one million saleable tonnes per annum of coking coal. Designs to double the capacity of the plant if required were well advanced. Phase 2 of the project was planned to deliver 5Mtpa of saleable coking coal, with a start date to be determined by market conditions.

CoAL said it anticipated that the bulk of the Phase 1 production would be purchased by ArcelorMittal SA. The two companies were continuing to negotiate the terms and conditions of a formal off-take agreement, reflective of the previously signed letter of intent that provides for ArcelorMittal SA to purchase between 2.5 and 5Mtpa.

During the quarter a further 20 exploration holes totaling over 2 000m were drilled on the planned east pit mining area. This improved the drilling density and results thereof confirmed the structure and composition of the coal. All cores have been geophysically logged and core samples have been sent to the company’s laboratory in Polokwane for analysis.