[miningmx.com] — WATERBERG coal junior Resource Generation (ResGen) said on Tuesday major construction work at its planned Boikarabelo mine would be placed on hold until it has secured a railage contract with Transnet Freight Rail (TFR).
In a statement issued to shareholders, ResGen said funding arrangements for the projects were conditional on a rail haulage contract with TFR.
“To date, TFR’s task team negotiating with ResGen has declined to commit to a contract and the company has elevated the matter to Transnet’s group chief executive who in the past has indicated his support for the Boikarabelo project and for a rail haulage contract,’ read the statement.
Said Paul Jury, managing director of ResGen: “The reluctance of TFR’s task team to commit to a rail haulage contract will delay the mine’s initial production until the first half of 2014, assuming an acceptable contract is agreed by the end of 2011 and funding is obtained.
“We believe the delay is related to process and timing, rather than inability to provide haulage.’
Transnet CEO Brian Molefe said in June the group’s plans to service the Waterberg coalfields hinged on whether it would succeed in moving general freight of the coal line, running from Ermelo in Mpumalanga to the Richards Bay Coal Terminal.
The transport logistics group was planning to move up to 15 million tonnes of non-coal goods to a proposed link via Swaziland.
ResGen in June signed a $16bn coal agreement with India’s Integrated Coal Mining, a unit of the RPG Group, for the supply of some 139 million tonnes (mt) of coal from Boikarabelo. The mine is expected to supply 73mt over the life of its first phase. The second phase will supply the balance of 66 mt to RPG.
The company said it has already completed detailed mining fleet and engineering designs for the project, while designs for a 40MW power station required for phase 1 was being finalised. Total capex for the first is now estimated to amount to $750m.
LICENCES
The company, however, said it has made major progress in obtaining two permits under the National Environment Management Act, as well as the Department of Water Affairs.
“Both licence approvals are expected during the final quarter of 2011,’ said the group.
