De Wittekransmine Gears Up - Business Media MAGS

SA Mining

De Wittekransmine Gears Up

Targets coal delivery in Q3. By Nelendhre Moodley.

At a time when new investment in coal mining is seemingly suspended in inaction, coal exploration and mining company Canyon Coal’s latest project, De Wittekrans, is in the starting blocks, getting ready to deliver first coal in the third quarter of this year. Kobus Rothmann, Menar Group project manager, tells SA Mining about it in an exclusive interview.

De Wittekrans is a greenfield coal project located south of Hendrina in Mpumalanga. The area is home to two large power stations – Arnot and Hendrina – operated by power utility Eskom.

“De Wittekrans is important since Canyon Coal requires a constant stream of new projects to replace other operating mines that have or will come to the end of their life. Two mines (Singani and Hakhano) were mined out in 2019 and need to be replaced in order to fully utilise the related investments the company has made in securing sidings and export allocations,” says Rothmann.

Aside from being a key project for Canyon Coal, De Wittekrans offers much value to the Mpumalanga area, which has an extremely high unemployment rate, as it is set to provide much-needed employment opportunities to the communities surrounding the project.

De Wittekrans is scheduled to employ 320 people, including contractors. According to Rothmann, where possible all labour will be sourced locally and trained, in most cases, by service providers and equipment suppliers.

“De Wittekrans will play an important role in the economy as it is set to supply reasonably priced coal to nearby Eskom power stations and generate substantial foreign exchange for the country through export opportunities,” says Rothmann.

Project development

During 2020, the De Wittekrans project received its mining right, water-use licence and environmental authorisation, signalling the green light for project development.

“The project has all the statutory approvals in place and is in the final design phase. Some of the processes to bring utilities to site are also under way, as is the sourcing and preparation for the establishment of the washing plant,” says Rothmann.

De Wittekrans will be developed initially as an opencast mine (Phase 1), with an economically minable reserve of 14.3 million tonnes of run of mine (RoM), while Phase 2 will comprise underground operations and host 106.5 million RoM tonnes.

According to Rothmann, the opencast operation will start mining at a depth of 17m extending to 160m below surface for the underground operation.

The project is set to produce 5 700kcal primary product with a 4 800kcal secondary product, over its estimated life of mine (LoM) of around 25 years. The LoM is based on an RoM production of about 300 000t/m.

The start-up capital expenditure for the estimated R1.6-billion project is around R730m, which consists largely of capex for development of the opencast operations and associated infrastructure – this will be funded from Canyon Coal’s own resources.

But the project, which is well placed between two key power stations in Mpumalanga, is yet to ink an offtake agreement with the local power producer.

“Canyon Coal does not currently supply any coal to Eskom. There are, however, plans to supply Eskom in the future from new projects.”

De Wittekrans is one of the new projects Canyon Coal has planned for this year. “The project’s locality makes it suitable for export and Eskom supply. Although tenders have been submitted to supply Eskom, this has not been finalised,” says Rothmann.

Canyon Coal operations

Canyon Coal currently produces 2.57 million saleable tonnes, with about 70% of the coal destined for the export market. The miner’s operations and projects are located in Mpumalanga and Gauteng.

Besides Khanye Colliery, its flagship opencast mine located in Bronkhorstspruit, with a remaining life of mine of 14 years, Canyon Coal also mines the opencast Phalanndwa Colliery located east of Delmas, Mpumalanga, and the Ukufisa Colliery in Springs, Gauteng, which has a life of mine of five years.

With the De Wittekrans project set firmly in its sight of production later this year, Canyon Coal also plans to start at least two more coal mines that together will produce 9.6 million RoM tonnes per annum, says Rothmann.

The miner employs 287 people directly with 476 people working as contractors.

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