Kangala Mine (Thermal coal)
- Mine development completed February 2014, first sales commenced April 2014
- Low cost Life of Mine open pit operation
Coal resource (JORC compliant)
112.6Mt Resource (gross tonnes in-situ) inclusive of 16.3Mt Reserve
2.4Mtpa Eskom product; 100ktpa ~6 000kCal (nar) export product
Mine development at Kangala commenced in May 2013 and the first saleable coal was delivered in April 2014 – on time and within budget.
Kangala is located approximately 65km east of Johannesburg, in the Witbank coalfield in Mpumalanga province, which supplies more than 50% of South Africa’s saleable export and domestic coal.
The greater project consists of three properties; Wolvenfontein (location of the Kangala Mine) and Middelbult located near several coal-fired power stations and benefits from excellent road, rail and power infrastructure.
The project hosts a JORC compliant coal resource of 112.6Mt (gross tonnes in situ) of which 65.2Mt are measured (including 16.3 Mt proven Reserve), 15.1Mt indicated and 32.3Mt inferred.
Saleable coal tonnages averaging 2.5Mtpa will be achieved from a planned 3.6Mtpa run-of-mine (ROM) production rate over the remaining six year life of the mine (LOM).
An 8-year Coal Supply Agreement (CSA) with the major South African power utility Eskom was executed in March 2013, renewable for another 8 years.
At a modest capital cost of A$ 47m, this operation is projected to supply an estimated average of A$ 15m EBITDA per annum (100%), with both costs and profit margins locked in and an initial projected four year payback period. Operating costs will be optimised at a low A$ 15 per ton.
The additional resource base at Kangala potentially allows for a total mine life exceeding 20 years by means of developing the adjacent Middelbult pit.
The operation is being run on an outsource model managed by an Universal Coal on-mine management team, with Stefanutti Stocks Mining Services supplying both the mining fleet and skill set to run Wolvenfontein pit, operating a fleet of 60t trucks, 85t excavators and supporting equipment. The dual circuit processing facility, a 350tph crushing and screening circuit plus the 320tph DMS washing plant is owned by Universal with the operation thereof outsourced to Mineral Resource Development (Pty) Ltd.
- Mining Right – granted.
- Environmental Authorization in terms of NEMA – granted.
- Waste License in terms of NEMWA – granted.
- Integrated Water Use License (IWULA) – granted.
- Land rezoning – granted.
- Middelbult Mining Right application lodged with the Department of Mineral Resources.