Keaton’s Eskom contract extended

[miningmx.com] — Johannesburg, April 7 (I-Net Bridge) – South African coal exploration and development company KEATON ENERGY HOLDINGS LIMITED on Thursday said its contract with South African power utility Eskom had been extended.

The company said the quality specification has changed with a concomitant price adjustment, but importantly so has the contract period.

In terms of the contract announced in July last year some 16.5 million metric tonnes were to be supplied over seven years.

Now some 20.8 million metric tonnes will be supplied over 10 years.

“Eskom has requested slightly better quality coal which will mean that, while much the same ROM (run of mine) volume will be mined on a monthly basis, it will be washed to a higher specification with 175 000 metric tonnes of washed coal being delivered to Eskom every month,” Keaton said in an operational update.

Vanggatfontein’s coal washing capability means that coal can be produced according to varying customer requirements.

Production ramp-up will begin at 50 000 tonnes per month in May, rising to 175 000 tonnes per month four months later.

The company said that at Vanggatfontein 145 107 metric tonnes of 5-Seam ROM coal have been produced since the mobilisation of the mining contractor in July 2010.

The 5-Seam plant was handed over to the processing contractor at the beginning of December 2010 and sales started immediately.

“After a slow start in December 2010 some 48 397 metric tonnes of 5-Seam nuts, peas and duff have been sold. The product has performed well in testing, resulting in good customer acceptance,” Keaton said.

The No. 4-Seam coal has been exposed and coaling has begun to support the completion and commissioning of the No. 4& No. 2-Seam plant, on schedule, during April 2011.

First deliveries of coal to Eskom are planned for the second half of May 2011.