The CHPP has the capacity to process 110,000 tonnes of run-of-mine coal per month while the second CHPP module is expected to be ready in the last three months of the year.
Processing of bituminous coal is expected to produce an export quality thermal coal and a lesser grade product for the domestic market, with Mooiplaats 1.7 kilometres from Eskom’s Camden Power Station.
But exploration failed to predict the “adverse geological conditions” the company has experienced, and bituminous coal mining is now expected in the first quarter of 2010.
“An extensive reassessment of the mine plan has been conducted during the past two months, which has involved underground horizontal drilling, surface geological drilling and wireline logging to gain better understanding of factors which may impact the mining layout,” Coal of Africa said.
The triple-listed company said it was considering a revised mining layout and tonnage schedule.
Coal of Africa managing director Simon Farrell said there had been challenging weak roof conditions during the mining of lean coal areas to access the bituminous coal.
For offtake agreements, Coal of Africa said it had reached in principle agreements with two international coal trading companies for at least 70% of Mooiplaats’ export coal.
“In both cases, formal agreements are expected to be executed in the coming weeks.
“Importantly, the terms and conditions proposed by the traders are extremely favourable and offer significant upside over and above what is considered standard terms within the industry.”
The company has also started discussions with a number of parties who produce their own unwashed coal but require coal processing.
“Commercial terms have not been completed, but will be based on a profit-sharing arrangement,” Coal of Africa said.
Mooiplaats was previously expected to produce export coal early in the upcoming financial year and the operation already has a five-year minimum 900,000 tonne per annum port allocation at Richards Bay in place.
The company also said the construction of the modular plant of its Vele coking coal mine in the nation was on schedule, with steel fabrication 50% complete and other major components on tender.
Shares in the company closed down 8.8% to 171.5c yesterday and are unchanged this morning.
