Wescoal’s Elandspruit hits monthly production target

JOHANNESBURG (miningweekly.com) – Wescoal’s flagship Elandspruit colliery is delivering its production target of 165 000 t a month of run-of-mine coal on a continuous basis, with mine development at an advanced stage, the company said on Monday.

Moreover, recently raised funding was being used to upgrade haulage roads and reduce the interaction between public road users and mine operational traffic, while progress had been made with the upgrade and construction of water control systems.

“Work at the Wescoal processing plant to implement cost-saving and debottlenecking projects is on track to be completed before the end of the current financial year,” the group said in a statement.

Wescoal’s Intibane colliery was, meanwhile, issued a water-use licence in the latter part of December which had since triggered a ramp-up in site activity to increase production to its steady-state target of 80 000 t a month.

Higher production from the colliery was expected to help drive volume-based cost dilution, while recent equity injections would reduce interest costs slightly.

Progress had also been made in acquiring resources contiguous to the Khanyisa colliery, with an agreement reached with unnamed parties that had the potential to extend the colliery’s mine life by between three and four years.

Mining activities at Khanyisa were also subject to the granting of a water-use licence, an application for which was submitted to authorities in February 2015.

“Wescoal continues to supply Eskom as well as other domestic and export customers, despite global coal oversupply and sentiment having had a negative impact on domestic and export price expectations.

“However, the weakening exchange rate will have a positive impact on the rand price of export coal going forward,” Wescoal noted in a trading update.

The group’s trading division, meanwhile, continued to meet expectations, despite the challenging local business environment and pressures on operating margins.