[miningmx.com] — COAL of Africa’s shares were charging on Wednesday following an announcement that the junior coal miner had been auhtorised to restart operations at Vele, its coking coal project located close to the Mapungubwe World Heritage Site in Limpopo.
In August last year CoAL was ordered by the department of environmental affairs (DEA) to halt construction of the project’s first phase because of contravening the National Environmental Management Act (Nema). The project has an initial production profile of 1 million tonnes per year.
“CoAL is pleased to advise that with reference to the application for rectifications in terms of the . Environmental Management Act, authorisation has been granted by the department of environmental affairs,” read a company announcement.
“As expected, the authorisation contains specific conditions the company will be required to fulfil due to the uniqueness of the area.”
“These (conditions) are some procedures we have to comply with, but I expect us to be working again within a week,’ said CEO John Wallington. CoAL would have to, among other things, inform all stakeholders of the DEA’s decision, including a coalition of NGOs which has already indicated it would appeal any authorisation to mine close to the environmentally sensitive area.
Wallington said the construction phase at Vele was expected to be completed within six to nine months from the restart date. Re-employment of staff and contractors would be phased in line with the production ramp-up.
CoAL’s shares were trading at R9.25 around 09:30 on Wednesday, up 14.3% for the day but still well short of levels close to R13.00 at which it traded a year ago, prior to Vele’s closure.
Wallington said it was difficult to quantify the losses which CoAL sustained due to the shutdown.
“I haven’t got a number right now, but for nearly a year you had R600m worth of capital standing still, doing nothing. Add to that the potential loss of revenue.”
The mine was ordered to close after CoAL went ahead with its development on the basis of being granted a new order mining right, with an approved environmental management programme from the department of mineral resources but without having received the required integrated water licence.
CoAL was eventually granted the water licence in April. In May it paid a R9.25m fine to the DEA as part of the rectification application.
The incident brought to the fore the complex nature of mining regulation in South Africa, where the right to mine involves dealing with three different government departments.
Mines Minister Susan Shabangu said in February her department was negotiating with the departments of water and environmental affairs, to streamline the regulatory process to create an integrated mining licence covering all areas of regulatory compliance.
