Dubai’s Centaur Holdings plans R500m De Roodepoort coal project

CENTAUR Holdings, a Dubai-based private equity company, is to raise up to R500m to build a new coal mine in South Africa’s Mpumalanga province with output going to Eskom.

“If the market shows it could be sustained we could amend the project to more export quality coal, but at the moment we are building the project so that we are able to optimise our options,” said Wesley Grogor, group head of mining operations for Centaur, of the 1.44 million tonne/year De Roodepoort coal project.

“We are adopting a smart approach to building the project so that it’s not too capital intensive. It’s looking quite good and right now we’ve put together an initial strategy for Eskom,” he added. Negotiations ahead of a coal sales agreement with the power utility had not yet started, he said.

Grogor said run-of-mine tonnages of some 40,000 tonnes per month would be mined from three different sections with the possibility of the company opening up another section if needed.

As for saleable product, there would be a decision to either sell to Eskom or go export, but not both. “120,000 tonnes per month barely touches sides as far as Eskom’s ongoing demand is concerned,” said Grogor.

The property was close enough to truck coal to one of Eskom’s power stations in the Mpumalanga province whilst there were rail sidings within four kilometres of the mine, said Grogor. “TFR [Transnet Freight Rail] virtually goes straight through the property so logistics is not a problem for us,” he said.

The group estimated there was over 100 million tonnes of coal available within the De Roodepoort property divided between high quality export coal and Eskom product.

The new order mining right had been awarded for the properties by the Department of Mineral Resources and now Centaur was in the process of applying for environmental permits including an integrated water use licence (IWUL), a critical regulatory requirement ahead of mine development in South Africa.

In respect of financing the mine, Grogor said Centaur was looking at the option of having a contractor participate on some level, possibly by contributing towards the building of infrastructure. He didn’t provide details.

“This is a key project for Centaur and demonstrates ambition and increasing size and scale of assets we are managing and attracting,” said Centaur Group CEO, Daniel McGowan in a company statement earlier this year.