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Coal growth prospects
Exxaro board approval for the coal supply agreement and
implementation of the project to expand Grootegeluk mine,
at a capital cost of R9 billion, was obtained in August 2008.
In September 2008 an agreement was concluded with
Eskom for the supply of 14,6Mtpa of power station coal
for 40 years from Grootegeluk mine to Eskom’s adjacent
Medupi power station, currently under construction. The
first coal is to be supplied in the last quarter of 2011 with full
production from 2014.
A pre-feasibility study and geological exploration work on a
potential greenfields mine adjacent to Grootegeluk mine is
being progressed. This potential mine has the capability of
supplying the market with power station and metallurgical
coal.
The commissioning of the Sintel char plant at Grootegeluk
mine to produce reductants for the ferroalloy industry is
behind schedule. This is due to delays experienced with
construction contractors. Ramp-up of the facility began in
August 2008 but was delayed to February 2009 when the
refractory lining of the four retorts failed during the heating
process. All retorts should be commissioned by end-June
2009, with full production of 160ktpa estimated by the end
of the year.
A feasibility study on producing high-quality market coke
from semi-soft coking coal produced at Grootegeluk mine
is under review.
Commissioning of the Mafube expansion project, at a capital
cost of R1,9 billion, in which the group is a 50:50 joint
venture partner with Anglo Coal, has been completed and
ramp-up to full capacity was reached by end-2008. At full
production, the mine will produce 3Mtpa of export steam
coal and 2Mtpa of power station coal.
Commissioning of the beneficiation plant at the
R290-million Inyanda mine was successfully completed in
the second quarter of 2008. Full production of 1,5Mtpa,
mostly for the export market, was exceeded by the end of
the year.
The Blackhill railway siding has been successfully
commissioned and is being operated at design capacity.
This
is currently the only train-loading facility in Exxaro where
Jumbo railway wagons can be loaded to full capacity.
All mining authorisations and regulatory approvals for
mining the Eerstelingsfontein reserves near Belfast to
supply 1Mtpa of product to the local market have been
obtained. Full production is expected by the second quarter
of 2009.
Exploration of the hard coking coal resource on the adjacent
properties of Moranbah South and Grosvenor South in
Queensland, Australia, in joint venture with Anglo Coal
Australia, is progressing according to schedule. Exploration
is focused on geological work to delineate long-wall
mining resources. The potential for bord-and-pillar mining
operations will also be explored. Moranbah South has the
potential to produce large volumes of premium-quality hard
coking coal.
Development of the Diepspruit reserve at New Clydesdale
(NCC) is planned to produce its first coal by the second
quarter of 2009. At full production, the R136-million project
will produce 1,3Mtpa run-of-mine coal for beneficiation at
NCC for supply to the export steam coal market.
Exxaro formed a joint venture with Promethium Carbon to
develop co- and on-site generation projects of up to 200MW
each. The bankable feasibility phase for some of these
projects is nearing completion and discussions are under
way with host parties on offtake agreements and contractual
arrangements. It is anticipated that three projects will be
initiated in 2009.
Exxaro has concluded an agreement with Sekaname
(Pty) Limited to begin a coal-bed methane exploration
programme in Botswana. The focus of the study will be
to prove economic gas flow rates from coal-bed methane
seams. The purpose of the joint venture, in which Exxaro
has a 75% interest, is to explore the feasibility of creating a
gas-based energy business.
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