Modern Mining October 2015

COVER STORY

Nsele coal mine contract

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),

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

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.

October 2015  MODERN MINING  19