[miningmx.com] — COAL of Africa on Thursday took another step to secure its tenure over the Vele coking coal development project – located close to the Mapungubwe World Heritage Site in Limpopo – by agreeing to measures aimed at offsetting its mining activities with a series of biodiversity programmes.
The JSE and ASX-listed coal miner signed a Memorandum of Understanding (MoU) with the Department of Environmental Affairs (DEA) and South African National Parks (SANParks). Concluding the deal formed part of the conditions attached to CoAL’s environmental authorisation permit for Vele, granted in July.
Its shares traded 8.9% higher at R8.50 on Thursday following the announcement, before retreating to R8.20 (up 5.1%) at 12:15.
“The parties agree to develop detailed biodiversity offsets programmes which will form part of this MoU as annexures,’ read the agreement. “The offsets framework will be underpinned by.the following components: natural heritage conservation; cultural heritage conservation, tourism development; and water resource management.’
The project was ordered to close in August last year after CoAL went ahead with development on the basis of being granted a new order mining right, with an approved environmental management programme from the department of mineral resources, but without having received the environmental authorisation and integrated water licences from the relevant authorities.
CoAL was eventually granted the water licence in April. In May, it paid a R9.25m fine to the DEA as part of a rectification application for the environmental permit.
Still, work at the site remains at a standstill after a coalition of environmental groups lodged an appeal against the granting of the water use licence in July. The lodging of the appeal had automatically suspended the water licence.
Wallington said CoAL has applied for a lifting of the suspension. This would be decided by the Minister of Water Affairs and ratified by a water use tribunal, at a date which was yet to be determined. He said development could start immediately following a successful appeal. Vele was originally earmarked to produce 5 million tonnes of coking coal per year, with a 30 year life-of-mine.
Wallington said production would at first not exceed 1 million tonnes per year; and said it was too early to determine whether environmental issues would allow the scale of production to be ramped up.
Vele is located just east of the Mapungubwe National Park and outside a designated buffer zone of the proposed Limpopo Transfrontier Conservation Area. Mapungubwe boasts a great variety of plant and animal life and formed the location of one Africa’s known historic city-like environments. It is also one of the most intensive food producing areas in South Africa, owning its fertility to the confluence of the Shashe and Limpopo rivers.
“(Mapungubwe) holds a real concentration of resources; the area around it is a tough landscape;’ said former Peace Parks Foundation CEO and consultant to the parties Willem van Riet. He said the challenge of maintaining the interests of mining, conservation as well as agriculture in the area would be “quite interesting’.
The DEA’s Deputy Director-General: Biodiversity and Conservation, Fundisile Mketeni warned the agreement with CoAL shouldn’t be interpreted that other companies seeking authorisation to mine in the area would be granted the same.
“There is a lot (of applicants),’ said Mketeni. “Some of those go to the core of the area. We’ll go back to drawing board to look at those applications and bite the bullet if need be.’ He said the department would make a “scientific decision’ on each of the application, among them projects proposed by Universal Coal and Anglo Coal.
