Universal Coal has made the first thermal coal sales from its Kangala mine in the Witbank coalfield, South Africa.
The miner has processed and stockpiled the run of mine (RoM) coal mined from Kangala since this February, and coal sales to South African power utility, Eskom, have now started.
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Under the terms of the original coal sales agreement, Universal Coal will provide Eskom with sales from Kangala for the next eight years, with an extension in place for 16 years.
Remaining production will target the more lucrative export markets, through a 100,000t a year off-take agreement with South Africa-based Exxaro Resources.
First export sales were on track to start by July and Universal Coal has already secured export allocation through Richards Bay Coal Terminal, in KwaZulu-Natal.
The company said that Kangala is ramping up towards its nameplate capacity and is expected to reach the target by the third quarter of the year.
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By GlobalDataUniversal Coal CEO Tony Weber said: “We are currently installing the DMS washing circuit on-site that will enable us to commence processing export quality coal.”
Universal Coal said cashflow from Kangala will assist with funding the development of its next operation, the combined New Clydesdale colliery / Roodekop project.
Located in the Mpumalanga province, Kangala is now preparing for a nameplate capacity of 2.4 million tonnes (Mt) per annum, of which 2.1Mt per annum is saleable.
In October 2013, Universal Coal started mining of the first RoM coal at the Kangala mine, which is the company’s first thermal coal operation.
The project features three properties, namely Wolvenfontein, Middelbult and Modderfontein, and contains thermal coal largely suitable for the domestic power generation market.
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