More details:By: Petronel Smit1st February 2011 Updated 1 hour 3...

More details:

By: Petronel Smit
1st February 2011

Updated 1 hour 3 minutes agoTEXT SIZE JOHANNESBURG (miningweekly.com) ? Black-empowered Sekoko Coal has signed an offtake Memorandum of Understanding (MoU) with power utility Eskom to supply coal to the Matimba power station.

The South African-based energy and minerals company said that it would supply the coal from its Waterberg project, which it owns in a joint venture (JV) with Australia?s Firestone Energy.

The key aspects of the agreement included a six-year term from the start of first coal production, expected by April 2012, while negotiations could lead to a longer-term contract extension from 2018 to 2032.

The MoU further stipulated that the Sekoko JV would deliver coal quantities based on Eskom's excess coal requirements and burn plan as applicable from time to time, and in line with the contract coal supply schedule.

Executive chairperson Timothy Tebeila said that the development with Eskom put the Sekoko JV in an advantageous position, as it could now also proceed with the development of phase two of the Lephalale-based Waterberg coal project and the procuring of the necessary financing.?

?The MoU marks the largest commitment Eskom has ever made to an emerging black-owned Limpopo-based junior coal mining company at the Matimba power station, clearly indicating that Eskom is serious about introducing a second coal supplier in the Waterberg district?s Lephalale area,? he noted.

The supply contract would offer Sekoko Coal and Firestone Energy an opportunity to maximise value for their product, as well as to establish a track record for reliable, high-quality coal production.

Production at the Waterberg coal project would start at about 43 000 t/m in April 2012 from an openpit, ramping up to 83 000 t/m by April 2015.

The coal produced from this project would be of a product mix quality, and was in high demand from steel manufacturers around the world as it was the preferred feedstock for use in coal-fired powered stations, steel making and high-end custom coke manufacture.

The project comprises eight farms in the Waterberg coalfield totalling some 7,8 ha, and entails the construction of an opencast coal mine on the Smitspan farm.
The definitive feasibility study had shown that the farm contains sufficient coal to produce around 120-million tons of coal for power stations, with some of the higher grade coal suitable for the metallurgical and the thermal export markets.

On Monday, Firestone appointed David Perkins as its chairperson to succeed John Dreyer, who has stepped down.

The company also recently appointed two new South Africa-based nonexecutive directors to serve as representatives of Sekoko.

It was expected that the replacements would help take Firestone to the implementation phase of the Waterberg coal project.

http://www.miningweekly.com/article/sekoko-firestone-jv-in-talks-to-supply-eskoms-matimba-station-2011-02-01