South African coal miner, Canyon Coal, a subsidiary of private investment company, Menar, will begin first production from its Gugulethu Colliery in Mpumalanga, in early 2024. This will be a major milestone for the Greenfields project, which set the miner back a whopping R600 million in capital invested, Gugulethu Colliery GM Jarmi Steyn tells Modern Mining.
Formerly known as De Wittekrans, Gugulethu, located southeast of Hendrina, is a project acquired out of business rescue. Canyon Coal’s newest venture aligns “perfectly with the company’s overall expansion drive of developing completely new projects – this is in addition to acquiring operational mines”.
According to Steyn, Canyon Coal seeks to invest in projects that yield high-quality products to cater for export and local markets.
“The development of the mine is happening at an opportune time as export opportunities for coal miners are opening in emerging Asian markets. The high-quality washed coal from Gugulethu will be perfect for global markets,” she says.
“The project,” she adds “was developed from scratch, and we have been able to reach significant milestones in under 12 months. Moreover, in the current economic climate, where people are most in need of job opportunities, a project like Gugulethu will contribute to alleviating unemployment.”
The mine’s presence in the community will create jobs, support local enterprise development, and bring skills training opportunities, says Steyn. “We believe this investment illustrates that, despite the numerous challenges South Africa’s economy faces, it is still possible to invest in new ventures. The mine was among the investment projects pledged at the 2023 SA Investment Conference lead by President Ramaphosa.”
The first phase of the mine will create more than 200 jobs, with priority given to residents of the host community. When fully operational, the mine will create a total of 430 jobs.
Project development
Gugulethu’s operations will unfold in two phases over its 20-year life of mine, with the first phase comprising three open cast pits and processing plant and the second phase consisting of underground operations scheduled to take place in seven years’ time.
A total of R600 million has been injected into Gugulethu Colliery. Phase 1 of the mine holds a reserve of 14.3 million tons of run-of-mine (ROM) coal. It also consists of three pits, one of which has been specifically designed to gain access to the underground reserve part of Phase 2. The second phase is expected to commence in 2030 after the conclusion of the open cast reserve.
By October, the coal miner was well on track to meet its scheduled activities, having advanced work on the box cut, which it had started mining in May, 2023.
“The topsoil and soft soil have already been removed, and blasting has commenced. The construction of the processing plant, which was refurbished and transported from Canyon Coal’s decommissioned Hakhano mine in Middelburg, is also in its advanced stages and will be functional in time for us to produce Gugulethu’s first washed coal in the first quarter of 2024. Yellow equipment and first delivery of mining machinery including Volvo ADTs, 140 CAT graders, Dozers, and Volvo Excavators arrived within the first six months of the year, while a new 28 t/h filter press system, to process the slurry more efficiently, is scheduled for installation at the plant by early 2024,” explains Steyn.
The first phase of the Gugulethu project is expected to produce 2.4 million t/y of coal, of which 1.2 million t/y will be export quality of 5 500 kc NAR coal.
Once mined, Gugulethu’s product will be transported 43 kilometres to the Rietkuil siding, and then moved to the Richards Bay Coal Terminal in KwaZulu-Natal.
“All of Canyon Coal’s export allocation at the terminal,” says Steyn, “is in use, but the capacity for Gugulethu’s tonnages will free up when the company’s 1.4 million ton-a-year Phalanndwa Colliery in Delmas reaches its end of life in 2024. Canyon Coal exports some of its products through Grindrod’s Terminal de Carvao da Matola port in Maputo.”
Social labour plan
The revised social and labour plan for Gugulethu has been submitted to the Department of Mineral Resources and Energy for final approvals.
Once approved it will make way for Canyon Coal to start implementing social upliftment projects, provide training opportunities, bursaries and learnerships to benefit surrounding host communities.
“While awaiting this approval, the mine has commenced with skills development for 40 local incumbents and machine operators. Internship opportunities have been advertised and we are in the final stages of shortlisting. Earlier in the year we also hosted a procurement roadshow to meet local businesses and inform them about the company’s way of engaging with suppliers and potential contractors. We have established a functioning community forum that ensures the interests of the host communities and the sustainability of the mining operation are looked after,” concludes Steyn.
