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COVER STORY
October 2015
MODERN MINING
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at the moment,” says Colling. “While this is
very low by world standards, it is still a figure
that we need to reduce significantly. This is one
of the reasons that Nsele is so important. It’s a
biggish contract – monthly volumes will build
up to about a million cubes – which will keep
a significant portion of our fleet busy over the
next several years.”
Nsele is located close to Kendal power sta-
tion in Mpumalanga, just a few kilometres
from the town of Delmas. The 2 600 ha prop-
erty is surrounded by operating coal mines,
with its immediate neighbours including
Keaton Energy’s Vanggatfontein mine, Exxaro’s
Leeuwpan mine and Stuart Coal. A Bankable
Feasibility Study (BFS) on the project was
completed several years ago. This is currently
being updated but the main parameters of the
project are known and Nsele will start as a 2,5
to 3 Mt/a (ROM) mine with a life of plus 20
years. The total capex to establish the operation
is estimated at just R350 million (with the IDC
willing to provide R240 million as debt fund-
ing). The life of mine strip ratio is estimated at
3:1 (tonnes). The project’s after-tax NPV (at a
10 % discount rate) is put at plus R600 million
and the IRR in excess of 29 %.
Outlining the background to Nsele, Heine
van Niekerk, a Director of DMC (and also of
its holding company, Anglo African Capital),
Nsele coal mine contract
Above:
MCC prides itself
on having one of the best
trained workforces in the
surface mining contracting
industry.
Below centre:
The Nsele
(Rietkuil) property lies in an
area which is already being
intensively mined. One of
the neighbouring opera-
tions is Leeuwpan.
Below:
MCC machines in
action – a Cat 992G loads a
Cat 777D dump truck.
says the project has been a long time in gesta-
tion. “I founded DMC in 2004 and one of the
assets we acquired was Nsele, which was then
known as Rietkuil, after the farm on which it
was located,” he explains. “We prepared a fea-
sibility report on the project in 2009, which
– given the market back then – looked at an
export coal project. We were intending to list
DMC on the JSE but around 2010 we received
an approach from overseas which eventually
led to DMC becoming part of Sable Mining, an
AIM-listed company.
“I’m not going to go into all the ins and outs