Con Fauconnier, CEO, Kumba
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Kumba runs rule over Waterberg mine
David McKay
Posted: Tue, 31 Jan 2006

[miningmx.com] -- KUMBA Resources is considering investing in a 40 to 50 million coal reserve in Botswana as part of a strategy that could make the diversified miner South Africa’s largest coal producer, said Ernst Venter, GM of Kumba Coal, a business unit of Kumba Resources.

“We’re in phase one of plans that will increase coal production to 43 million tons/year from the current 20 million tons,” said Venter of Kumba’s long-term business plans. Including the incorporation of Eyesizwe’s coal output, an empowerment firm that is investing in Kumba Resources, combined coal output would increase to 68 million tons/year, he said.

South Africa’s largest coal producer is Ingwe Coal, a unit of BHP Billiton, which produces 56 million tons/year.

Kumba Coal said on Tuesday (31 January) that it had undertaken a R2m to R3m pre-feasibility study in developing the Mmamabula Central property, a shallow part of the Mmamabula Coal Resource, that could be mined from surface.

“Preliminary analysis of the coal resource indicates that there could be scope for a 2 to 2.5 million tons/year of thermal (power station) coal, with the possible added benefit of some 0.5 million tons/year higher value metallurgical coal,” Kumba Coal said. The mine had an estimated life of mine of 20 years.

Kumba Coal would farm into the property with joint venture partner Magaleng if the coal property proved to be feasible. An investment decision was likely mid-year.

Venter could not disclose details of a desk-top study that had identified provisional capital spend. “The capital expenditure really depends on whether we follow a phased approach on the mine or not,” said Venter. The mine could produce a cocktail of metallurgical and steam coal. The resource was 60% comprised of steam coal.

The Waterberg represents a major part of South Africa’s coal mining future.

According to Con Fauconnier, Kumba Resources CEO, about 8% of the country’s coal output was from the Waterberg, but the area accounted for 44% of total reserves.
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“In the next 20 years, some of the mines are going to be mined out in the Witbank fields and the Highveld fields. Then one would need to say: ‘where’s our power generation going to come from?’ Now the Waterberg is an obvious candidate,” Fauconnier said in an interview with Miningmx last year.

He believed that the development of Matimba, a power station owned by Government utility, Eskom, could add create further demand for steaming coal. However, the mine could be configured to produce metallurgical coal if the power station expansion did not go ahead.