www.miningne.ws
Highly commended 2011 PICA Cover of the Year - B2B Publishing
The knowledge you need
ining
media
from the industry experts
Hot seat
Snowden Technologies’ GM Nic Pollock beds down his strategy to mature the business
ThyssenKrupp Materials Handling DIAMONDS
A sparkling sensation
PANEL DISCUSSION
ICT – optimising critical information pathways
PYROMETALLURGY
Medupi’s massive stockyard
The old, and the new
ISSN 1999-8872 • R35.00 (incl. VAT) • Vol. 5 • No. 5• May 2012
Lots of power in a compact format. The K 970 Chain can make 390 mm cuts from one side. It can make openings as small as 11 cm x 11 cm, so it is perfect for irregularly shaped openings. The powerto-weight ratio is first rate and features SmartCarb™, a built-in automatic filter compensation and a highly efficient vibration dampening system. The K 970 Chain is also equipped with an X-TORQ® engine, which reduces emissions up to 75 % and lowers fuel consumption by 20 % and DuraStarter™, a dust-sealed starter that boosts reliability and product life. Air Purge and a decompression valve make it very easy to start.
HUSQVARNA K 970 CHAIN 94 cc - 4.8 kW - Bar 350 mm - cutting depth 390 mm, weight excl. fuel and cutting equipment 9.4 kg
HUSQVARNA CONSTRUCTION PRODUCTS
www.husqvarnacp.co.za Share Call: 08600 48759. Tel: 033 846 9700. info@husqvarna.co.za Husqvarna is a registered trademark. Copyright © 2012 HUSQVARNA. All rights reserved.
CONTENTS
T H E K N O W L E D G E YO U N E E D
ining
May 2012
FROM THE INDUSTRY EXPERTS
Highly commended 2011 PICA Cover of the Year - B2B Publishing
www.miningne.ws
14
MEDIA
THE KNOWLEDGE YOU NEED
ining
ON THE COVER
FROM THE INDUSTRY EXPERTS
ThyssenKrupp Materials Handling
HOT SEAT
Snowden Technologies’ GM Nic Pollock beds down his strategy to mature the business
delivers Medupi's massive new stockyard P6
ThyssenKrupp Materials Handling DIAMONDS A sparkling sensation
PANEL DISCUSSION ICT – optimising critical information pathways
PYROMETALLURGY
MEDUPI’S MASSIVE STOCKYARD
The old, and the new ISSN 1999-8872 • R35.00 (incl. VAT) • Vol. 5 • No. 5• May 2012
EDITOR’S COMMENT
3
Mining – it’s out of this world
MINING NEWS
20
4
The top mining stories headlining this month
HOT SEAT
10 Snowden Technologies beds down strategy to mature the business
HOT TOPIC
12 Wescoal creates a bigger and brighter future PRECIOUS STONES: DIAMONDS
14 Rockwell Diamonds rocks its turnaround strategy 18 DiamondCorp – laced with potential 20 Petra Diamonds capitalises on world-class kimberlites 26 De Beers Consolidated Mines straightens its business
26
MATERIALS HANDLING
29 Grootegeluk expansion – moving massive amounts of coal
34 Melco – conveying efficient solutions ICT PANEL DISCUSSION
37 Mining’s information technology providers ELECTRICAL AND INSTRUMENTATION
46 Wade Walker’s electric new strategy 48 ENI’s aspirations to increase market share PYROMETALLURGY
50 Verref – rich in refractories 53 Energy efficiency – it’s all in the ‘tweak’
48
TRANSPORT AND LOGISTICS
56 A mega manganese transport contract 58 Botswana carries the load PROJECT DELIVERY
60 The latest on equipment components and essential services
CETERUM CENSEO
64 SA mining needs state intervention Inside Mining 05/2012
1
Editor’s comment Publisher Elizabeth Shorten Editor Laura Cornish laura@3smedia.co.za Creative Chief Executive Frédérick Danton Senior designer Hayley Mendelow Senior sub-editor Claire Nozaic Sub-editor Patience Gumbo Marketing Manager Martin Hiller Production Manager Antois-Leigh Botma Production coordinator Jacqueline Modise Financial Manager Andrew Lobban Administration Tonya Hebenton
MINING
It’s out of this world South Africa’s diamond sector is overflowing with expansion and optimisation projects, driven primarily by escalating prices, but more importantly by the fact that there are almost no more economical pipes left in the world to mine, raising the value of diamonds as they become increasingly rare.
Subscription sales Nomsa Masina Distribution coordinator Asha Pursotham Printers United Litho Johannesburg Tel: +27 (0)11 402 0571
___________________________________ Advertising Sales
Stacey Glad Tel: +27 (0)11 465 5452 Cell: +27 (0)83 567 0073 stacey.glad@lantic.net ___________________________________
MEDIA
No. 4 5 Avenue, Rivonia 2191 th
PO Box 92026, Norwood 2117 Tel: +27 (0)11 233 2600 Fax: +27 (0)11 234 7274/5 www.3smedia.co.za ___________________________________ Annual subscription:
South Africa: R350.00 (incl VAT & postage) SADC countries: US$80 Foreign: US$100 ISSN 1999-8872 Inside Mining Copyright 2012. All rights reserved. ___________________________________ All material in Inside Mining is copyright protected and may not be reproduced either in whole or in part without the prior written permission of the publisher. The views of contributors do not necessarily reflect those of the the publishers.
It is common knowledge
that decades of exploration and sampling have revealed that while there may be thousands upon thousands of kimberlite pipes across the globe, only a ‘handful’ of them are viable to mine. Today, well over two centuries since the first diamonds were discovered and mined, many of those pipes have been depleted of their carats. All of South Africa’s known diamond-rich pipes are in operation and ramping up to deliver the same quantities as they once did in their prime. De Beers Consolidated Mines (DBCM) is set to invest billions in converting its opencast Venetia mine into an underground operation, for example, enabling it to deliver the same number of carats as it has already produced since it started production. Nevertheless, one fact remains dominant in every diamond producer and, hopefully, consumers’ minds – when will the carats run out? Are there any new pipes left to discover, particularly in South Africa? According to DBCM CEO, Phillip Barton, the answer is yes! Although he declines to say where, he confirms that they are looking. And if anyone can find a new kimberlite, it’s De Beers! Considering geographical constraints are no longer constraints, the world and its oceans have already become new exploratory zones. Diamonds are being mined along the Namibian coast successfully, begging the question – what exactly can we extract from our sea beds? How much is really out there? We have only tapped into a tiny percentage of the possibilities. But why stop with our oceans when we have an entire solar system within reach? An American company called Planetary Resources, constituted largely with space exploration scientists from NASA (National Aeronautics and Space Administration), has announced its intention to mine nearby orbiting asteroids for natural resources, specifically PGMs, iron ore, nickel and water. I am still struggling to deal with the reality of this possibility – but this is no joke, the world is evolving and technology really is taking us to the stars. According to the company’s co-chairmen, Eric Anderson, who pioneered commercial spaceflight, and
Peter Diamandis, an international pioneer in the commercial space arena, there are almost 9 000 asteroids to explore and that is just the starting point. They say there is more platinum in one asteroid than all the platinum that has been mined in our history. If they are confident enough to say that, then their aspiration to mine asteroids is more than just a dream. Considering the company has gathered together a host of ‘new generation’ risk-tolerant investors, such as CEO of Google, Larry Page, and James Cameron; the company is financially ready to bring the solar system’s resources to our doorsteps. And they are not talking about the distant future, but intend to make this a reality in theirs, and our lifetimes. This is ground-breaking news – and will change the world forever. Asteroids aside, our cover story this month – the massive coal stockyard for the new Medupi power station – is not only fascinating to read about, but is even more fascinating to see, which I had the enormous pleasure of doing. And I have the safety jacket and hard hat to prove it, as you can see. A huge thanks to ThyssenKrupp Materials Handling for hosting me on site and allowing me to appreciate the scale of the stockyard, and the enormous machines they are supplying on site to ensure it runs like clockwork. Watch this space for updates of the project over the rest of the year. Laura Cornish
To our avid readers, be sure to sign up and get the
latest updates and inside scoop from the mining industry. Check out what we are talking about on our Facebook page or follow me on Twitter and have your say. @mining_news www.facebook.com/pages/Mining-News
Inside Mining 05/2012
3
Mining news www.miningne.ws
Top mining stories headlining this month AUSTRALIA
Platsearch announces JV with Thomson Resources Thomson Resources is an active explorer
compiled by Ameerah Griffin
| SOUTH AFRICA | IDC launches a major new PGM venture Source www.miningne.ws
execute our unique growth opportunities. Our beneficiation partnership with the IDC has the potential to transform the PGM smelting industry and to provide third-party juniors access to cost-efficient concentrate processing,” says CEO of Pallinghurst, Arne Frandsen.
| SIERRA LEONE |
The Industrial Development Corporation (IDC) of South Africa, together with Pallinghurst, announced a major investment in the platinum mining and beneficiation industry that will see the creation of a significant platinum group metals company in the North West province of South Africa. NewCo has the potential to create up to 9 000 direct and permanent jobs, and produce up to 1.1 Moz/pa of PGMS in the next five years. The DC has made a R3.24 billion investment for a 16.2% interest in the consolidated entity, which provides the foundation for a large, shallow and low-cost mining complex, with long life – in excess of 30 years. The venture has a promising strong growth profile. NewCo’s resource base is approximately 70 Moz of 4 PGM and the majority of these ounces are shallower than 600 m. “This consolidation has been almost five years in the making and represents an exciting development for all stakeholders. The IDC’s equity investment will allow NewCo to remain debt-free with a strong balance sheet, thereby providing financial security to
4
Inside Mining 04/2012
Stellar Diamonds announces high diamond grades for Lion-5 Kimberlite Source: www.miningne.ws
Stellar Diamonds has provided final bulk sampling diamond grades and diamond values from its Lion-5 kimberlite dyke at its 87 km² Kono diamond licence in eastern Sierra Leone. “The final results from the first phase of evaluation of the Lion-5 kimberlite prove that the body is of both high-grade and highquality diamond. Based on these results, the company is planning a resource definition drilling campaign over Lion-5, as well as the nearby Pol-K kimberlite, to establish a significant maiden resource for the Kono project,” says chief executive, Karl Smithson. Over $US19 million (R148.4 million) has been invested to date on the Kono licences by Stellar and its former joint venture partners. This has resulted in the systematic exploration of the dyke swarm, including a high-resolution geophysical survey and a number of
Source: www.miningne.ws
Australia-based resource company PlatSearch has entered into two joint venture agreements with Australian exploration company Thomson Resources. The agreements cover five exploration tenements, wholly-owned by PlatSearch, over the Ghostrider and Achilles projects – located within the Cobar region of central-west New South Wales. Thomson can earn up to 80% interest in each with exploration expenditure of US$1 million (R7.8 million) over five years on each project. PlatSearch will maintain a 20% ‘free-carried’ interest up to Definitive Mine Feasibility stage. Both projects are considered high quality and will add value to the exploration portfolio of Thomson, a company that PlatSearch helped conceive and bring to IPO. PlatSearch currently holds a 25.6% interest in Thomson. Since listing on the Australian Securities Exchange in December 2010, Thomson has conducted significant exploration within the Thomson Fold Belt, which includes the projected northern extension of the Cobar Basin, one of Australia’s important mining districts. Thomson Resources is the largest ground holder in the region and much of Thomson’s recent work has focused on exploring rock units believed to be equivalent to those found within the Cobar Basin. Thomson has built up considerable expertise in exploring for Cobar-style deposits and will bring this capability to the joint venture.
test shafts being sunk to up to 85 m depth for bulk sampling. Smithson believes that the Kono project can substantially add to the 3.1 million carat resource base recently established from the Tongo (0.66 million carats) in Sierra Leone and Droujba (2.5 million carats) in Guinea, kimberlite projects, both of which will also be expanded as Stellar continues to grow its respective resources.
| NORTH AMERICA | Mining chief resigns as part of deal with Rio Tinto Source: www.nytimes.com Robert Friedland, one of Canada’s most prominent mining developers, resigned as chief executive
of Ivanhoe Mines, as part of a $US 1.8 billion (R14.1 billion) equity financing agreement Rio Tinto former with Rio Tinto, CEO, Robert the company’s Friedland major shareholder. Along with Friedland, six other directors and four executives at the company also resigned. They will all be replaced by Rio Tinto appointees. The agreement signals the apparent end to a long-running battle between Friedland and Rio Tinto, which brought its stake in Ivanhoe up to 51% in January.
For explosives, think BME.
Cover story: materials handling
FEEDING MEDUPI
A stockyard of substantial proportions May signifies a milestone event for materials handling experts ThyssenKrupp Materials Handling as its largest contract awarded to date – the Medupi power station coal stockyard – moves into operation, writes Laura Cornish. A mighty BIG contract In November 2009, Eskom awarded ThyssenKrupp Materials Handling (TKMH), a division of ThyssenKrupp PDNA Engineering, with the turnkey contract to design, manufacture, construct and commission the coal stockyard, which serves as the ‘coal pit stop’ between the colliery and the developing Medupi power station. “The contract also includes all of the conveyors in the stockyard, as well as two elevated conveyors linking the north and south silos, seven transfer houses, two drum reclaimers and two stackers,” says
6
Inside Mining 05/2012
Jim Hoy, project manager. The second drum reclaimer, which is due to be completed in May 2013, will provide redundancy in the system. Despite Eskom announcing that the first unit of its new Lephalale-based power station is behind target, TKMH retained its Eskom-specified deadline: to be ready to receive its first coal in May. Activity on site a month prior to the deadline was a hive of activity – revealing the stockyard development to be far advanced and the final stages of completing both the first stacker and reclaimer well under way.
“Two of the transfer houses are almost complete and the remaining five are far advanced as well. The kilometres of conveyors, including an elevated portion feeding the silos, all show significant progress,” assistant marketing manager, Matthias Göing pointed out during a site visit in April. In addition to meeting its deadline target, Göing adds that the massive bi-directional drum reclaimer is the biggest drum reclaimer in the world, measuring 43.4 m in width. The diameter of the drum shell alone is 4.7 m, with a 7.2 m cutting circle, and
In each issue, Inside Mining offers advertisers the opportunity to promote their company’s products and services to the appropriate audience by booking the prime position of the front cover which includes a two-page feature article. The magazine offers advertisers an ideal platform to ensure the maximum exposure of their brand. Please call +27(0)11 465 5452 to secure your booking.
Cover story: materials handling
weighs just under 200 t. The mass of the entire machine is about 500 t. “It alone is capable of recovering enough coal to feed all six boilers at full operational capacity – delivering 4 788 MW of power,” he says. “Our drum reclaimers are selected for their high blending efficiency and reliability. They are stable and long-lasting in operation and have a low total cost of ownership,” Göing continues. Both stacker and reclaimer are automated and are designed to operate remotely from a central control room. “Until the coal is ready to feed the first boiler (boiler 6), our stacker, drum reclaimer and conveyors will stand ready,” Hoy points out. The stockyard itself will comprise four 80 000 t working stockpiles and an additional two seasonal stockpiles, ensuring that the power station will have a continuous supply of coal in the event of an interruption in supply from the mine.
TKMH retained its Eskom-specified deadline: to be ready to receive its first coal in May
BELOW Side view of the stacker with by-pass tripper and the drum reclaimer RIGHT Belt conveyor leading to transfer house
Inside Mining 05/2012
7
Cover story: materials handling
Close-up view of the drum reclaimer
Eskom – a valuable client
One conveyor belt will feed a maximum of 4 000 tph of coal from the Grootegeluk mine to the stockyard, while one of two conveyors will feed 3 400 tph from the stockyard to the two 1 000 t silos, which in turn will feed the boiler lines.
Unparalleled values Although part of a global organisation, TKMH is ‘truly South African’. All design work, manufacture and part sourcing is executed locally. “Our mandate was to achieve 92% local skills and supply content for our Medupi contract,
“The massive bi-directional drum reclaimer is the biggest drum reclaimer in the world, measuring 43.4 m in width.” Assistant marketing manager, Matthias Göing
Matthias Göing, standing on the stacker on site
8
Inside Mining 05/2012
Eskom has for years been one of TKMH’s most valuable and longest-standing clients. There are few Eskom plants in South Africa that are operating without some piece of TKMH equipment. One of the company’s most recent projects included the supply of an ash handling facility, including shiftable conveyor systems and two 1 200 tph spreaders to handle all ash for Eskom’s Majuba power station in Mpumalanga. Looking forward, TKMH will take its materials handling skills to Eskom’s second new power station, Kusile, whose contract includes three drum reclaimers and two stackers.
which we exceeded. We believe in developing and uplifting local skills and retaining them in the country,” says Göing. The company embraced local initiatives established to alleviate unemployment and promote small enterprises, such as AsgiSA (Accelerated and Shared Growth Initiative for South Africa). Says Hoy: “We found numerous BEE companies, including black women-owned businesses and small/medium enterprises in Gauteng and the surrounding areas of Lephalale, that were properly qualified and we would like to use again in the future. The challenge was securing those who were not already extremely busy and flooded with work. There were also many who were not qualified and Eskom-compliant. Despite such challenges, we were successful in sourcing and securing the right companies. This is in line with our philosophy to inject and recirculate money into the country and the economy, and help develop a long-term profitable South Africa.”
uppe marketing A05651/AM
Komatsu… a heritage of success
At Komatsu our vision has resulted in a proud heritage of technological success, and we are continuously evolving to meet the needs of our customers. Our unique and advanced equipment provides our customers in South Africa and world-wide w i t h innovation a nd ex ceptional v alue. We u n d e rst a n d t h e c h a l l e n g e s o u r c u s tomers encounter in their business; that is why our construction, surface mining, utility and process equipment is designed to meet the highest productivity, safety and environmental standards.
Komatsu – for the best in: • • •
Earthmoving and surface mining equipment Utility equipment Process equipment
Komatsu – Unique and unrivalled.
Komatsu Southern Africa (Pty) Ltd, cnr Diesel and Isando Roads, Isando. Tel: 011 923 1000 | Fax: 011 923 1111 Customer Care Line: 0860 566 2878
www.komatsu.co.za
Hot seat: ICT
Maturity brings new growth Mining information systems solutions provider Snowden Technologies, a division of global mining consultant Snowden, is undergoing significant transformation as newly appointed group GM Nic Pollock beds down his strategy to mature the business, writes Laura Cornish.
A
lthough only joining the company in February this year, mining ICT veteran Nic Pollock is already well under way with a new business model and strategy aimed at growing the technology division further and delivering it to the market as a mature and commercial software solutions provider. His position sees him join Snowden’s senior management team and although based in Perth, Australia, he will carry out his role in South Africa and across the globe. “Snowden Technologies has reached the 10-year mark and is ready to adapt its
10
Inside Mining 05/2012
premium brand market reputation to a more mainstream market,” Pollock explains. When Snowden CEO Craig Morley founded the division, his vision was to build technologies to strengthen the company’s consulting force. Today, it is recongised for its ability to develop unique and customised software solution tools, often exclusively for blue-chip mining clients. This however has seen some of its more leading innovative products become industry standard practice. “Snowden Technologies has turned 10 years old and the appointment of Pollock
coincides with a need for us to mature this important line of our business. Pollock’s experience, particularly with his achievements at previous companies Gemcom and Mincom, gives us the direction we need for future growth,” says Morley. Says Pollock: “As the mining technology market begins to mature more rapidly, demand will dictate a more simplified and off-the-shelf product suite landscape. My intention is to develop our product suite along this avenue – making our tools commercially available. Thanks to Snowden Technologies’ foundations, it is uniquely
Hot seat: ICT
positioned to walk on both sides of the street. We have a large and experienced team of software development professionals and over 160 senior mining professionals providing valuable guidance to mining clients all over the world. We walk the talk in our understanding of the full value chain and can identify where the gaps lie in the software offerings out there.” As a mature software technology house, standards will be put in place to sell products across a wider market. In addition to maintaining its suite of current software solutions, the company will continue to fulfill its role as a ‘technology incubator’, and it will focus on creating new products to fulfil an identified gap in existing solutions that can be roled out on larger, broader platforms.
The intention is to stop releasing customer-specific versions of the product and standardise it as an off-the-shelf package beginning with Version 7, due out later this year. Snowden is also evaluating the best distribution channels for other popular software tools including Evaluator and Supervisor. Evaluator is a strategic optimisation tool, also originally designed for the consulting business. Today there are more than 50 projects using it. “We are looking at our
with 300 sites around the world actively using the software suite across most commodity types, including bauxite, chrome, diamonds, iron ore, manganese, nickel, silver, uranium, coal, copper, gold, lead, mineral
“As the mining technology market begins to mature more rapidly, demand will dictate a more simplified and off-the-shelf product suite landscape.” Nic Pollock
The case in point Snowden’s Reconciler software solution, originally designed as a consulting product, has become one of the company’s most successful commercial systems. It captures and reconciles information from resource/reserve estimates, grade control, truck dispatch, survey pick-up and plant production systems. “We have customised this particular solution for many mining clients, including BHP Billiton, Rio Tinto and Kumba Iron Ore,” says Pollock.
options for taking this product to market – either ourselves, or through a vendour.” The Supervisor suite of applications provides an efficient, robust and easy-touse toolset for practical geological data analysis. Initially developed for use by Snowden’s consultants, the application has been adopted by clients throughout the world and is now regarded as a benchmark by the mining and resources industry. It has an extensive track record of providing business value to the resources industry,
sands, platinum, tantalum, zinc and more. “We are open to ensuring we secure the best distribution channels for this product,” Pollock adds.
Pollock’s background Pollock joins Snowden with 20 years of experience in the enterprise software and services markets globally, commencing in 1992 with Natwest Bank in London and then Oracle in Sydney. Since leaving Oracle to set up Viewlocity in Australia, Pollock has gained significant experience in running Asia-Pacific operations. Since moving back to Perth in 2004, almost half of his career has been spent servicing the mining and resources sector for software companies Gemcom and Mincom.
Inside Mining 05/2012
11
Hot topic: coal
WESCOAL FORGETS THE PAST
And creates a bigger, brighter future Despite undergoing almost a year of legal battles and court proceedings with its opencast contractor Sutha Civils (and BSM Mining), Wescoal Mining has emerged victorious and has wasted no time in re-implementing a significant growth strategy aimed at realising an annual coal production of between 2 and 4 Mtpa in the next three years, CEO Andre Boje tells Laura Cornish.
I
t is common practise in the mining industry to change or disengage mining contractors; this could happen for for many reasons, including lack of performance. Unfortunately, when Wescoal Mining took this route with Sutha Civils, the situation turned nasty. Sutha Civils attempt to liquidate Wescoal Mining, the mining arm of coal trading and processing company, Wescoal Holdings, based on unsubstantiated claims that the company was selling inferior quality coal to Eskom. It turned out to be completely false.
12
Inside Mining 05/2012
“Although damaging to our reputation, we have put this period behind us, and are returning our attention back to our priority: growing our mining business,” says Boje. “We have now issued a resource statement for a variety of properties we own and will either mine, sell or relinquish them back to the state. We don’t want to be a prospector; we want to be recognised as a serious player in the junior coal mining space. We remain active and driven by our focus to supply Eskom and elevate overall margins within the company to a higher level.”
ABOVE AND OPPOSITE Aerial views of Khanyisa colliery
The company acquired a significant 51% stake in a greenfields prospect – Pegasus – late last year. It remains under cautionary, however, regarding an asset swap, as well as the potential sale of the remaining 49% stake in Pegasus, which is owned through Wescoal chairperson, Robinson Ramaite. Boje believes the coal market in particular is back to a pre-recession boom. The company wants to benefit from current prices and so is keen to move its new asset into production as quickly as possible.
Hot topic: coal Looking back over 2011, its single operating mine, Khanyisa returned to full production in April, despite production difficulties. For 2012, its Vlakvarkfontein asset is expected to move into production after the mining right is granted, which at the time of writing was expected at the end of March. “Although Khanyisa only has another year of operational life, it should deliver on its annual target of 1 Mtpa. Our 18-month to two-year lifespan Vlakvarkfontein project will be accelerated into production without hesitation following receipt of our mining licence,” Boje states.
Pegasus: the crown jewel Late last year, Wescoal Holdings announced it had acquired 51% of the Pegasus project, which includes 919 ha of the Geluk 276 farm and a further 250 ha of surface
The intention is to move Pegasus into production at the end of 2013, after which it will remain operational for between eight and 10 years rights in relation to portion 2 of the farm. Previously owned by BHP Billiton Energy Coal South Africa, Pegasus is an undeveloped metallurgical and export quality thermal coal deposit with a 15 Mt measured resource. It is situated 10 km from eMalahleni and is contiguous to Exxaro’s Inyanda colliery. The deposit is shallow, with an average stripping ratio of 1.46, and comprises Witbank coal field No. 2 Upper coal seam, No. 2 Lower coal seam and No. 1 coal seam. The ultra-low stripping ratio means the operation will be a low-cost opencast mining operation. “The acquisition is in line with Wescoal’s stated goals of securing high-quality coal resources that can be mined by the opencast method to increase production and sustainability,” Boje points out. The intention is to move Pegasus into production at the end of 2013, after which it will remain operational for between eight and 10 years. The Pegasus product is a low phosphorus coal, which will be sold into the metallurgical industry. Coal not meeting the required metallurgical specifications or
Mining resource statement Portion
Size
Actions/future plans
Portion 16 of Vlakvarkfontein 213 IR
238 000 t of Eskomgrade coal
• Mining right application submitted to DMR (December 2010) • Additional prospecting work being carried out
Portion 12 of Vlarkvarkfontein 1.9 Mtpa of high-grade • Mining right application submitted 213 IR thermal coal to DMR (December 2010) • Additional prospecting work being carried out Portions 1, 2, 4, 7,8, 9, 10, 13, 14, 15, 16, 17, 40 & 41 of Vlaklaagte 330 JS excluding areas 2 & 3
29.5 m inferred resource
• Mining right application submitted to DMR (June 2011) • Additional prospecting work being carried out
Silverbank 611 IR excluding portions 1,10, 12 & 14 district of Sanderton
3 925 ha 24.5 Mtpa of Eskom and thermal coal
• Mining right application submitted to DMR (August 2011) • Additional prospecting work being carried out
Verblyden 387 IS excluding portions 18 & 35
2 266 ha • Mining right application submitted 37 Mtpa of Eskom and to DMR (August 2011) thermal coal
Portions 8, 9 & 10 of Mooiplaats165 IR
Insufficient for additional comment
• Application for renewal of Prospecting Rights with DMR
Portions 1, 3,4, 6, 14, 23, 30- 2 946 ha • Application for renewal of 36, 40 and 62 of Elandspruit 5.1 Mtpa of high-grade Prospecting Rights with DMR 291 JS district Middleburg thermal coal Following preliminary prospecting it was determined that the following two resources are not economically viable and the Prospecting Rights will be allowed to lapse Portions 4, 5,23, 23, 28, 42, 48 & 69-74 of Keerom 374 JS district of Middleburg
6 828 ha Insufficient for additional comment
Portion 10 of the farm Bankfontein216 IR
5.1 Mtpa of high-grade thermal coal
matching export prices will be sold into the export market. “There was intense competition from local and international mining companies to secure the Pegasus project as the reserve is recognised by the industry as one of the last great coal resources available in the Witbank and Middelburg coal fields,” says Boje.
An independent valuation of Pegasus is being conducted by Mineral Corporation Consultancy. “Once a partner is on-board, we will move Pegasus forward rapidly. It will also require its own plant,” Boje notes. With Pegasus in production, Wescoal will reach its 2 Mtpa mark by the end of 2014 and with an additional asset, it will achieve the 4 Mtpa mark by the end of 2015.
Inside Mining 05/2012
13