The coal mining development and operating company Coal of Africa Limited (CoAL) published their downscaled plan for their Makhado Project this week.
The Makhado Project is a planned open-cast mine situated north of the Soutpansberg and 65km southwest of Musina.
Initially the project was delayed as the integrated water-use licence for the project had been suspended, following an appeal that was made by the anti-mining group, Vhembe Mineral Resources Forum (VMRF).
This suspension was lifted by the Minister of Water and Sanitation, Nomvula Mokonyane, in May this year. According to CoAL's CEO, Mr David Brown, this was the last of the regulatory permits that they needed before proceeding with the Makhado project.
The project's original development plan included a 26-month construction phase, followed by a four-month ramp-up period to achieve a production rate of 5.5 million tons per annum of coal, which would require a capital amount of about $281million (R3.8 billion).
Since then, CoAL proposed a Makhado Lite Project at a reduced costing price of an estimated $75 to $85 million and that will only require a 12-month construction period. This smaller project will produce approximately 1.7 million tons per annum of saleable coal. The new lite project will, however, still allow for the future expansion of mining and production.
Brown further said CoAL continued to ensure that it was well positioned to unlock near-term shareholder value from the flagship Makhado Project. "As part of this, the company recognised the limited cash flow that would have been generated during Makhado's pre-production phase and as a result, the CoAL board approved the Makhado Lite Project in September 2017, ensuring similar returns to the original design with lower capital requirements and a shorter construction phase," Brown said.