MC Mining announced on Tuesday the conclusion of a coal-sale and purchase agreement for the export-quality thermal coal to be produced by Phase 1 of the Makhado hard-coking and thermal-coal project in the Nzhelele valley. The parties to the agreement are MC Mining’s wholly owned subsidiary, the Limpopo Coal Company (Limpopo), and one of the world’s largest producers and marketers of bulk commodities.
MC Mining’s subsidiary, Baobab Mining and Exploration, is the owner of the Makhado Project and the nine-month Phase-1 construction period is expected to commence during the third quarter of 2019. “Phase 1 will generate approximately three million tonnes per annum (Mtpa) of run-of-mine (ROM) coal from the west pit and this will undergo preliminary processing at the mine, yielding an estimated 2Mtpa of ROM coal. The resultant ROM coal will be transported and sold to Limpopo which will, with its modified plant, complete the final processing, producing up to 0.57Mtpa of export-quality thermal coal and 0.54Mtpa of hard-coking coal,” said MC Mining in a press release. Construction of Phase 2 at the Makhado Project (Makhado Lite) in 2020, said MC Mining, is expected to produce 4Mtpa of ROM coal from the east and central pits, resulting in some 1.0Mtpa of thermal coal.
According to MC Mining, one of the key highlights of the agreement is that the saleable thermal coal will be delivered to the Musina siding and sold on a free-on-rail basis, which takes into account the actual rail and port charges.
“We have contracted with one of the world’s largest producers and marketers of seaborne traded coal for the majority of the life of Phase 1. The signing of this agreement is a further significant step in the advancement of Makhado,” said MC Mining’s CEO Mr David Brown.
Brown added that the phased development of the Makhado Project will generate a significant number of employment opportunities in the Limpopo Province and the export of the thermal coal will utilise previously tested logistical infrastructure.News Source: zoutnet