coal seeks partner for 2-billion ton project

I think that with Don Turvey and the former Mashala team's track record of developing low grade domestic coal projects, COA's Chapudi coal project in Limpopo could be a perfect fit for Conti.

http://www.businessday.co.za/articles/Content.aspx?id=128185

COAL of Africa (CoAL) may look for a partner to help it develop nearly 2-billion tons of thermal and coking coal resources after concluding a 75m deal to buy Rio Tinto?s Chapudi coal project in Limpopo.

CoAL has learnt "big lessons" from its experiences at its Vele project, which appears to have stalled over environmental concerns and worries about the effect that a proposed mine at Vele would have on the nearby Mapungubwe heritage site.

CoAL will also apply lessons from its run-in with environmental authorities in Mpumalanga at its Mooiplaats coal mine to its Makhado coking coal project that is contiguous to the Chapudi and other properties it will acquire in the deal with Rio Tinto and its partner Kwezi Mining, CoAL CEO John Wallington said yesterday.

Rio Tinto is focused on large coal-export projects and Chapudi is better suited to supplying an Eskom-type power plant, Rio Tinto CEO Tom Albanese said earlier this year.

The Chapudi project adds 1- billion tons to CoAL?s 947-million ton resource in the Soutpansberg coal basin.

ArcelorMittal has a 16% stake in CoAL and will be the main buyer of the first 2-million to 3- million tons of coal from Makhado once it is in production. CoAL will submit a mining right application early next year when it completes a definitive feasibility study.

The Department of Mineral Resources has said with a properly completed application it should take six months to process a mining right, instead of a year.

It will take about 18 months and 400m to construct the first phase of Makhado.

Exxaro Resources has the option to buy a 30% stake in Makhado and would be a logical choice of partner to join CoAL on the much larger resource base.

"There is no doubt in my mind that we will look for a partner. The main reason would be that the scale of these resources is significant and we have learnt some valuable lessons on how difficult it is to bring resources into play," Mr Wallington said.

Bringing a partner in will reduce the risk of the larger project and add other sources of funding and skills, he said. There have been no talks with Exxaro or any other party on joining CoAL in the Soutpansberg basin.

CoAL plans to extract a bulk sample of Makhado coal to send to ArcelorMittal for testing in its furnaces. The intention is to see how much of the 2-million to 3- million tons of coking coal imported each year to make steel can be replaced with Makhado coal.

Talks are under way with Transnet about rolling stock and locomotives on an existing railway line to facilitate exports of coking coal through Maputo. There is a strong possibility of private involvement in funding trains but this would be from a foreign company rather than CoAL.

A coal-burning power plant will be needed in the region to allow the development of the thermal coal deposits. CoAL?s thermal coal exploration work in Soutpansberg is at an early stage and no talks have been held with Eskom or independent power producers about setting up a plant in the area, Mr Wallington said.

England win by an innings and 71 runs, and take a priceless 1-0 lead with three Tests to be played. Swann had been identified as the man to spearhead England's push on the fifth day and he's done just that, finishing with 5 for 91to bowl England to their 100th Test win over Australia. The hosts suffer the ignominy of their first innings defeat at home since their capitulation to the West Indies at Perth in 1993 and, to be brutally honest, it's hard to see them bouncing back to win two of the next three games to reclaim the urn. Stranger things have happened, of course, but Australia will need something truly inspirational