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New South African coal mine will start production this year

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Work is underway at Canyon Coal’s Gugulethu project close to Hendrina in Mpumalanga, South Africa. The mine, formerly known as De Wittekrans, will start producing export coal towards the end of this year. Image credit: Canyon Coal

New South African coal mine will start production this year

Canyon Coal, a subsidiary of private investment company Menar, is developing a new coal mine in the Hendrina region of Mpumalanga in South Africa. Production at Gugulethu (formerly known as De Wittekrans) is expected to start towards the second half of 2023.

The first phase of the Gugulethu project, on track to be completed in 8-10 months, is expected to produce about 1.2 million t/y of 5 500 kc NAR coal.

According to Gugulethu Colliery GM Jarmi Steyn, Canyon Coal has already issued tenders for the civils and the processing plant.

Gugulethu is a greenfield project located southeast of Hendrina that Canyon bought out of business rescue. Phase 1 of the project holds an economically mineable reserve of 14.3 million tons of run-of-mine (RoM) coal. It comprises of three pits, one of which has been specifically designed to gain access to the underground reserve, as part of Phase 2.

This fully licensed project has a life of mine of more than 20 years based on a RoM production of about 2.4 million tons a year from the opencast section. The underground sections, which will commence operations in 2028 after the completion of the open cast reserve, will sustain production of 2.4 million tons a year.

The commissioning of the processing plant is scheduled towards the end of 2023. The transfer of the plant from the depleted Hakhano mine – Canyon’s first opencast colliery – for re-assembly at Gugulethu has begun.

Total investment earmarked to develop the mine is over R1.4 billion. Canyon Coal will invest R600 million in Phase 1 of the project. The development of the underground mining section will require a further R890 million.

Phalanndwa prepares for closure (New South African coal mine to start production this year)

Gugulethu’s product will be trucked about 43km to the Rietkuil siding for transportation to the Richards Bay Coal Terminal in KwaZulu-Natal.

All of Canyon Coal’s export allocation at the terminal is in use but the capacity for Gugulethu’s tonnages will free up when the company’s 1.4 million ton-a-year Phalanndwa Colliery in Delmas is closed later this year when it reaches the end of its life.

Canyon exports some of its products through Grindrod’s Terminal de Carvao da Matola (TCM) port in Maputo.

The construction of Gugulethu’s opencast will create more than 200 jobs, with a priority given to residents of the host community. In total, the mine will create 430 jobs when it is fully operational.

Steyn says her first goal for the Gugulethu Colliery is to ensure it is developed safely within schedule and budget. “Then along with the team, I want to see it become a flagship site for Canyon Coal in terms of regulatory compliance and production performance, obviously to ensure maximised stakeholder and shareholder value,” says Steyn.

New South African coal mine to start production this year

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