The Goedgevonden mine will produce 6.7 million tonnes per annum, with a mine life in excess of 30 years.
The mine will be developed through a majority black-owned and controlled joint venture, the Goedgevonden JV, in which ARM subsidiary ARM Coal owns a 51% share and Xstrata Coal South Africa owns the remaining 49%.
Commissioning of the new mine is expected in the first half of 2009, with full production anticipated from 2011.
It is anticipated the project will create over 1100 jobs during the construction phase and 300 permanent jobs when fully operational.
Xstrata Coal chief executive Peter Coates said the Goedgevonden mine is the first of its kind to be undertaken by a majority black-owned and controlled company and will be a high productivity, low operating cost business.
Department of Minerals and Energy director-general Sandile Nogxina said the project represents meaningful majority black participation in the growth of South Africa’s coal industry.
“This new mine will provide an ongoing source of wealth creation for our nation for over 30 years and represents an important foreign investment for the Mpumalanga province and the country as a whole,” Nogxina said.
