[miningmx.com] — COAL of Africa, the coal development company operating in South Africa, on Thursday said the cost of developing its Vele Colliery in the Limpopo Province had increased by 27% due to delays caused by the suspension of development at the mine.
Work at the colliery, near Musina in the Limpopo Province, was stopped in August
after the Green Scorpions issued the company with a compliance notice related to it meeting the requirements of South Africa’s environmental legislation.
The company in March estimated capital expenditure required to develop the Vele
Colliery was R450m.
“This estimate has now been revised to R571.4m and includes expenses attributable to the suspension of activities on site, primarily the de-mobilisation of equipment and manpower, box-cut design and infrastructure plan adjustments as well as processing plant scope changes,” CoAL said.
By the end of September 2010, the company had incurred R525.3m, requiring R46.1m to complete the construction of phase one of the project.
Releasing an operational report for the quarter to end September, CoAL said the
development phase of the Vele Colliery was almost complete with the construction of the open cast mining pit, processing plant and related mining infrastructure near
completion.
“Pending the grant of the Integrated Water Use Licence, production was expected
to commence, followed soon thereafter by first sales of coal,” the company said.
CoAL is awaiting the approval of its application for an integrated water use licence for the Vele Colliery, which was submitted to the department of water affairs almost a year ago.
The licence is required before any coal mining or processing activities can commence at the colliery.
Regarding the compliance notice, CoAL said it “has fully adhered to the instructions contained within the compliance notice”.
It said it has also held several “constructive meetings” with the department of
environmental affairs (DEA) in a bid to resolve the issues identified.
“The company has also applied to the minister of the DEA for the suspension of the
compliance notice during this process and hopes that a ruling will be made soon,”
CoAL said.
The company said it was confident that both the water licence and environmental
issues would be resolved.
But the timelines required to complete the processes have resulted in the company
having to reduce the workforce at the Vele Colliery by 596 people.
“This process is taking longer than originally envisaged, with a resolution now
expected before year end,” CoAL said.
