Moabsvelden Coal to produce 2.4m tonnes per annum
Wescoal announced the commencement of the box cut phase of the Moabsvelden project which will produce 2.4 million tonnes per annum ROM over the 10-year life of mine, to be supplied to Eskom in terms of a 10-year coal supply agreement (CSA) that has been signed with the power utility.
Good progress has been made in the first half of FY 2021, despite adopting a slow-ramp up approach for the project. Various early-works construction activities have been completed or are nearing completion and the first blast was successfully carried out in October 2020.
Operationalising this asset is a major capital expenditure project for Wescoal, requiring an initial investment of R250 – R290 million for the first phase of the project, with c.R140 million already spent to date.
The Company continues to closely monitor and manage cash flows, including optimisation work to reduce and/or reschedule CAPEX spend. It is anticipated that first coal from Moabsvelden will be reached in Q4 FY 2021.
LEEUW BRAAKFONTEIN COLLIERY DISPOSAL
Various parties have expressed interest in acquiring the Leeuw Braakfontein Colliery (LBC) due to the cancelled disposal transaction as previously announced. The Company launched a formal disposal process and has now selected a preferred bidder for LBC.
Though at an advanced stage, there is no certainty that negotiations will lead to a successful conclusion of the disposal process during the current financial year.
