Up to 100,000t of ROM coal from Vlakvarkfontein to go to South African mine
South Africa-focused miner, Continental Coal has made its first sale of domestic quality coal from its Vlakvarkfontein Coal Mine in South Africa to an existing, nearby major coal mining operation.
The agreement for the sale of run-of mine coal from the Vlakvarkfontein mine covers up to 100,000 tonnes of coal, which will be supplied to the domestic coal market in South Africa.
The company is progressing longer term off-take arrangements pending final testwork and coal quality analysis results from the first bulk samples sent in May 2010.
The coal will be sold free-on-truck and will be transported to the buyer's nearby operations for final weight determination and sampling and analysis.
Under the sales agreement, Continental will receive about $A1.3 million up front on the 100,000 tonnes and the balance due on subsequent deliveries.
Chief executive officer,Don Turvey said the first sales contracts at Vlakvarkfontein marked a milestone for the company.
"Since our first coal production blast at the end of May, we have received a tremendous amount of interest from several international and local parties seeking to secure a long-term supply of our domestic quality coal at Vlakvarkfontein, Mr Turvey said.
"With the results pending from the 6,000 tonne bulk sample that was sent for testing at various plant sites and laboratories, we anticipate concluding a long-term off-take agreement for Vlakvarkfontein?s domestic coal product shortly.
"The benefits of this immediate sales agreement are significant with the coal being delivered straight from the mine as a ROM product, without any crushing, screening or washing. We currently have about 65,000 tonnes on the ROM stockpile and anticipate delivering the balance of the 100,000 tonnes over the next month."
The company expects production at its predominantly export thermal coal mines at Vaalbank, Project X and Vlakplaats to commence in 2011, at the rate of over 300,000 tonnes per month of export coal.
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