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Elandspruit hits production target

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World Coal,

Wescoal Holdings’ flagship Elandspruit coal mine in Mpumalanga Province, South Africa, is now delivering its production target of 165 000 tpm ROM, according to the company’s latest market update. Mine development is also at an advanced phase and in line with the project plan and budget.

Recent fund raising initiatives raised Rand 52 million, which have been used to upgrade haulage roads and reduce the interaction between public road users and mine operational traffic at Elandspruit. Progress has also been made on upgrading and construction of water control systems.

Although the fund raising provided less than expected, it was “sufficient to initiate crucial de-risking and optimisation projects across the Wescoal Group,” said the company, as well as relieving pressure on the company’s cash flow.

Work on the Wescoal Processing Plant to implement cost-saving and debottlenecking projects is on track before the end of the current financial year, added the company. The plant is capable of producing a range of products for domestic use, export and South Africa’s state utility, Eskom.

At Intibane coal mine, site activity ramped up in the latter part of December 2015 after the issuing of a water use license. Targeted steady state production is 80 000 tpm ROM coal suitable for Eskom or low-grade domestic markets.

Progress was also made on acquiring resources contiguous to Wescoal’s Khanyisa coal mine that would extend the life of the mine by between three and four years.

Agreement has been reached with various counterparties and is subject to a number of conditions, as well as approval from the Department of Mineral Resources. Mining activities at Khanyisa is also subject to the granting of a water use license; application for this was made in February 2015.

Wescoal supplies Eskom, as well as other domestic and export markets. “Global oversupply and sentiment have has a negative impact on domestic and export price expectations,” the company said. “However, the weakening exchange rate will have a positive impact on the rand price of export coal going forward.”

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