Menar coal and anthracite projects, South Africa – update

Location: Gauteng, KwaZulu-Natal and Mpumalanga, in South Africa.
Project Owner/s: Menar, through its subsidiaries Kangra and Canyon Coal.
Project Description: Menar, through its subsidiaries, expects to produce 20-million tons of coal a year from 2022/23.

Several projects are proposed, including:

• the Bekezela (formerly Palmietkuilen) project, near Springs, in Gauteng.

• the Gugulethu (formerly De Wittekrans) project, south of Hendrina, in Mpumalanga. The construction of Phase 1 comprises opencast mining from a reserve of 14.3-million tons. Phase 1 of the project will comprise three opencast pits, one of which has been specifically designed to gain access to the underground reserve. Phase 2 will entail mining the remainder of the reserve using underground methods. The estimated overall life-of-mine (LoM) for Gugulethu is more than 20 years, with a production rate of about 200 000 t of run-of-mine (RoM) a month.

• the Thuso (formerly Witfontein) underground and opencast coal project, north-west of Bethal, in Mpumalanga, which has an estimated LoM of 11 years, based on RoM production of about 100 000 t a month.

• the Riversdale Anthracite Colliery (RAC) project, in Vryheid, KwaZulu-Natal, will be an underground project with a six-year LoM, based on RoM production of 30 000 t a month.

• the Sukuma (formerly Springfield) opencast project, in Vereeniging, Gauteng, with an LoM of about 30 years, based on RoM production of about 600 000 t a month.

• the Gila (formerly Koppie) underground project, in Bethal, Mpumalanga, with an LoM of about 20 years, based on RoM of about 150 000 t a month.

• the Umzila (formerly Birmingham) underground project, in Hendrina, Mpumalanga, with an LoM of 20 years, based on RoM production of 200 000 t a month.

• the Ukuduma (formerly Aasvoëlkrans) underground project, 10 km north-west of Utrecht, in KwaZulu-Natal, with an LoM of 4 years, which is based on RoM production of about 50 000 t a month.

• the Mngeni Shaft, which will extend the LoM of the Zululand Anthracite Colliery (ZAC), located about 27 km north-east of Ulundi, has an anticipated LoM of approximately 6 years, based on an in situ extractable reserve of 1.48-million tons at 20 000 t a month. Drill-and-blast mining methods will be used to produce the anticipated RoM production of approximately 240 000 t a year of anthracite.

• the Kusipongo underground project, outside of Piet Retief, in Mpumalanga, with an LoM of more than 20 years, based on RoM production of 125 000 t a month. The Udumo adit forms part of the Kusipongo coal resource. Kusipongo includes the development of the Balgarthan A adit, located about 25 km south-west of the Udomo adit, which will have one underground section.

• Menar has ramped up the Khanye Colliery, in Bronkhorstspruit, Gauteng, which is producing 2.4-million tons of coal a year.

• Mining operations started at the Phalanndwa Colliery extension following the first large-scale blasting of coal on July 17, 2019. The project is expected to extend the LoM to 2024. The project has reached steady-state production and is producing an average of 170 000 t a month of RoM.

Potential Job Creation
Menar projects are expected to create about 2 000 jobs, including 320 at the Bekezela project, 430 at the Gugulethu, 200 at Thuso, 200 at the RAC operation, and 400 at the Sukuma opencast mine. Ukuduma will create about 70 jobs and Mngeni Shaft about 200 jobs. The operating Khanye Colliery employs 400 people and the Phalanndwa Colliery extension project employs 200 people.

Capital Expenditure
Menar plans to invest about R7-billion in coal projects from now until 2026 including R1.5-billion in Bekezela, R600-million in Gugulethu for Phase 1 , R1.5-billion in Sukuma, R700-million in Thuso, R1-billion in Umzila and Gila, R300-million in RAC, about R388-million in Ukuduma and about R130-million in the Mngeni Shaft development.

Planned Start/End Date
Kangra produced the first coal from its new underground Udumo adit on February 9, 2022.
Gugulethu and Bekezela are expected to start production in 2023 and 2024 respectively, while Thuso is expected to begin in 2024. The development of the RAC project will also start in 2024.
The Sukuma, Umzila, Gila and Ukuduma projects are expected to start production in 2025.
Mngeni Shaft is expected to start production during the third quarter of 2023. It is now expected to achieve first coal in October this year. The start dates for the projects are subject to coal market conditions.

Latest Developments
ZAC GM Wayne Rowe has indicated that the R137-million Mngeni shaft project is nearing completion, with water infrastructure and electrical reticulation installed in February. This month, basic surface infrastructure, such as offices and change houses, will be finalised. ZAC has spent almost half of its budget, with R67-million committed so far. To date, a significant portion of the Mngeni boxcut has been mined and security arrangements have also been completed.

The Mngeni shaft will use drill-and-blast mining methods to increase production by an anticipated 180 000 t/y to 240 000 t/y of anthracite. The shaft will be about 240 m long and 34 m deep, with seam thicknesses from 2.3 m to 2.6 m. Rowe has said there has been scope creep regarding mining costs, as the decision has been made not to mine the boxcut in the traditional manner. Construction of Phase 1 of Gugulethu has started. The relevant authorisations, including the mining right, water use licence and environmental authorisation, have been granted.