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SA coal in $950m expansion boost Posted: Fri, 07 Dec 2007 [miningmx.com] -- ANGLO American and BHP Billiton are to spend a combined $955m expanding annual production 6 million tonnes and 3.2 million tonnes respectively as well as building a new processing plant. The investments will be in South Africa's Mpumalanga province. Anglo American has approved $505m (R3.4bn) in capital expenditure to build the Zondagsfontein mine which will produce 3 million tonnes/year of thermal coal, which will be exported, and 3 million tonnes/year of domestic grade coal. It will also build the Phola Coal processing plant, an 8 million tonne/year facility which will be used equally between it and BHP Billiton. BHP Billiton will share the cost of the plant. For its part, BHP Billiton has approved the brownfields expansion of its Klipspruit mine at a capital cost of $450m (R3.1bn) including its contribution to Phola. Klipspruit will lift output to 8 million tonnes/year from its current 4.8 million tonnes/year. Both projects have a life of mine of about 20 years with increased production from both beginning in the second half of 2009, the groups said in separate announcements. Anglo American said the Zondagsfontein mine would create about 1,000 new jobs at full tilt. The expansion programmes will go some way to dismissing concerns in South Africa that the two companies, listed in London, were seeking to disinvest from the country. Anglo American's project also provides extra support to the view that CEO, Cynthia Carroll, who took the reins of Anglo in March, has a more aggressive expansion programme than under previous management. Under Carroll's watch the group has completed a much-vaunted empowerment deal with Anglo Platinum, invested in two mines in North and South America, and sold down its stake in AngloGold Ashanti. Anglo American's investment is the first through its empowerment vehicle Anglo Inyosi Coal (AIC) which was created in February and has the Inyosi consortium as a 27% shareholder. Inyosi comprises the Lithemba Consortium, Pamodzi Coal, WDB Investment Holdings and local mine community trusts. The project is situated near the town of Ogies. Click Here to subscribe to our daily newsletter
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