[miningmx.com] — AUSTRALIAN and JSE-listed energy group Resource Generation (ResGen) announced on Wednesday it has increased its ownership of Ledjadja from 49% to 74%.
Ledjadja owns the prospecting rights which contain the major portion of the coal resources and reserves of the proposed Boikarabelo mine in the Waterberg region of Limpopo.
ResGen has lodged the mining rights application for the Boikarabelo mine and has designed the infrastructure for the mine. It expects to complete the mine by 2012.
The Boikarabelo coal seam is between 20 and 30 metres below the surface, enabling low-cost, open-cut mining. The seam is between 120 and 130 metres thick, with zones of varying quality thermal and soft coking coal.
ResGen’s Boikarabelo tenements have probable saleable reserves of 603.3 million tonnes of coal, an indicated resource of 569.5 million tonnes, plus an inferred resource of 1.7 billion tonnes. These figures are expected to increase following further drilling.
The Waterberg coalfield contains 40% of South Africa’s remaining coal resource, the major portion of which is of a high quality grade. The country is expected to consume 269 million tonnes of coal per annum by 2018 to meet its growing energy requirements.
It is estimated that the mine will produce 3 million tonnes per annum of export quality coal and 3 million tonnes of domestic quality coal for the first five years from 2013. The second stage from 2018 would increase production to 40 million tonnes of run-of-mine coal per annum.
A pre-feasibility study confirmed the potential for profitable mining operations. The mining rights application was lodged in February 2010. Production is currently scheduled to start in January 2013. The initial mine investment is R4.5bn.
The open cut mine is in immediate vicinity to the construction of Eskom’s large-scale power station Medupi and existing power station Matimba. The mine is also only a short distance away from the rail link to South Africa’s coal ports.
ResGen will contribute an estimated R2.5bn towards the development of rail and associated infrastructure.
The mine is expected to provide annual employment and skills development in the depressed Waterberg region with an estimated 811 direct jobs and 500 indirect jobs.
The Limpopo province, alongside the Eastern Cape and the Free State, is one of the poorest in South Africa. The life of the mine could be up to 100 years.
“We are already well advanced with planning the mine and have designed the coal handling and preparation plant,” according to the company’s website.
The shallow overburden means that a small fleet of equipment can produce a lot of coal. Costs will be relatively low, and multiple mining benches will provide the flexibility to extract the coal quality required.
“Our Boikarabelo tenements are only 40km by road from an existing rail system that provides access to domestic markets and to the ports of Maputo, Richards Bay and Durban for export shipments. These three ports all have potential to expand their coal capacity, and a proposed new railway to Walvis Bay in Namibia, if constructed, would also offer access to export markets,” it said.
“The land is flat and easy to access, and we have bought 8,397 hectares which will enable development of the mine to proceed quickly when we receive funding and mining rights,” it noted.
