ASX-listed Universal Coal has begun refurbishment of the Coal Handling and Processing Plant (CHPP) at NCC (New Clydesdale Colliery) – located in the Kriel District, south of Witbank – in anticipation of the commencement of thermal coal processing in September (2016). NCC – which has been on care and maintenance since late 2013 – was acquired by Universal from Exxaro in 2014. It is adjacent to Universal’s Roodekop property and Universal’s intention is to develop and operate the two assets as a single project.
Aerial view of the NCC site. Infrastructure includes processing facilities with a capacity of 2,2 Mt/a (photo: Universal Coal).
NCC will become Universal’s second coal operation, following its Kangala colliery, which recorded a run-of-mine coal production in excess of 3,2 Mt last financial year.
Ingwenya Mineral Processing has been nominated as the on-site CHPP contractor responsible for the recommissioning and future operation of the CHPP. Mining operations will begin in September 2016 at the Diepspruit shaft area in line with the timing of the CHPP recommissioning process.
Weighbridge infrastructure has already been installed in anticipation of coal product flows before the end of the 2016 calendar year.
According to Universal, negotiations with potential off-take partners, including Eskom, are reaching an advanced state with final assessment and selection of a nominated off-taker to occur shortly.
Funding of the return to operations of NCC will initially be covered on an equity basis from existing cash reserves. However, discussions continue with existing debt providers for the enlarged Universal Coal Group.
Universal was recently the subject of an A$126,4 million takeover bid by Coal of Africa Limited (CoAL) but the offer lapsed in mid-July, with CoAL noting that Universal’s long-term Coal Supply Agreement (CSA) with Eskom for NCC had “not yet been finalised or signed and that Universal has therefore not yet commenced mining activities at NCC, at which first coal was expected to be produced in the first half of 2016 as envisaged in the Offer Document.”
Universal announced on 18 July that it had taken “an executive decision to commence underground mining operations at NCC with supply to the export thermal coal markets and the balance of product being sold in the domestic space.”
