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CoAL's Vele gets into gear

Apr 29 2012 15:40 Jan de Lange

Company Data

COAL OF AFRICA LIMITED [JSE:CZA]

Last traded 0.60
Change -0.02
% Change -0.03
Cumulative volume 341406
Market cap 629.02m

Last Updated: 28/07/2014 at 03:10. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg – A year late, the Coal of Africa [JSE:CZA] (CoAL) Vele Mine near Musina last week produced its first coal for the export market in one of the country’s most ecologically sensitive areas.

The development of this mine, which will produce exceptionally valuable semisoft metallurgical coal, was brought to a halt for 14 months by the departments of environmental affairs and water – which has to date been the most serious clash between a mine, environmental authorities and environmental organisations.

An exploration pit which in September 2010 caused the Department of Environmental Affairs to issue an order suspending all developmental activity in the mine, is now a fully fledged opencast pit exposing the rich coal seam.

It is no small achievement for CoAL to have eventually brought the mine to production – less than half a year after all the regulatory elements were awarded.

This makes Vele the country's first mine that fully complies with the requirements of the National Environmental Management Act – a piece of legislation that has so far been in the middle of a tug-of-war between three state departments with jurisdiction over the mining industry.

Apart from the regulatory requirements, CoAL was obliged to give outside parties the right to decide on environmental management on the mine’s premises.

To that end CoAL entered into an agreement with the Department of Environmental Affairs and with South African National Parks (SANparks) to ensure that the neighbouring Mapungubwe World Heritage Site remains protected.

The agreement obliges CoAL to establish an independent environmental management committee chaired by SANparks, and on which non-governmental organisations also have a seat.

The most important opposition group, the Save Mapungubwe Coalition, was with considerable effort eventually persuaded to participate.

The representatives in the community come from the three state departments involved, non-governmental organisations, municipalities and farming communities.

The environmental management committee is a watchdog to ensure that CoAL complies with the environmental requirements to which it and the other parties have agreed.

CoAL would be unwise not to repeat this formula at its Makhado Mine, which is receiving almost as much opposition from Limpopo environmental groups.

One of the undertakings that CoAL has given is that the mine’s footprint – the size of the pit – will never be more than 50ha.

CoAL’s chief executive John Wallington says that they are operating the mine while applying continuous rehabilitation. When a portion of the open pit has been exhausted, it is immediately rehabilitated. It will not remain in that condition until the end of the mine’s life.

But CoAL will exploit a small portion of Vele for opencast mining. Another portion west of the existing open pit will be similarly developed, but within five years the shallower portions of the seam will be exhausted and underground mining will commence. By far most of the reserve is too deep for opencast mining.

Further commitments given by CoAL are that the height of processing plants will not exceed 20m, that the colours of these plants will harmonise with the environment and that there will be effective dust control.

The Vele Mine will initially deliver only about 1m tonnes of coking coal for the metallurgical industry out of the overall production of 2.7m tonnes a year, but the mine is designed to be able to produce 5m tonnes of coking coal a year.

The infrastructure and freight handling capacity will however need to be improved before this can happen.

On Tuesday Vele’s management loaded the first 30 rail trucks with around 1 500 tonnes of coal.

 - Sake24

For more business news in Afrikaans, go to Sake24.com.

 
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