Coal of Africa unveils new project

Company boss says Makhado operation not linked to Vele controversy, writes Lucky Biyase

Coal of Africa's move into a new project in Makhado (Louis Trichardt) has nothing to do with the problems it faces at its Vele colliery near Mapungubwe, said chief executive John Wallington.

"The Makhado project is the future of the company and will certainly change the economic landscape of Limpopo because thousands of jobs are going to be created," Wallington said.

Coal of Africa, which is listed on the JSE and in Australia and has two thermal-coal projects in Mpumalanga, has lodged an application for mining rights at the Makhado coking coal project. This production will be supplied to steel maker ArcelorMittal SA.

The feasibility study on the project is almost complete, Wallington said.

At its Vele project, about six kilometres from the border of International Heritage Site Mapungubwe, Coal of Africa has run into trouble with a coalition of environmentalists, the Mapungubwe Action Group. The group consists of the Endangered Wild Life Trust, the Association of Southern African Professional Archaeologists, Birdlife SA, the Worldwide Fund for Nature, and Wilderness Foundation SA.

The coalition obtained a court order against Coal of Africa and Mineral Resources Minister Susan Shabangu, which halted mining operations at Vele. The legal battle is expected to resume in March.

"We are pursuing our plan in Mapungubwe. We have suggested a number of compromises, including moving (further) away from the boundary of Mapungubwe," Wallington said.

"We are not six kilometres from the actual (heritage) site. We are six kilometres from the boundary. I think that needs to be clarified," he added.

Mapungubwe is among 24 World Heritage Sites declared in 2003 by the UN Education Science and Cultural Organisation (Unesco).

Last year a delegation from Unesco visited Mapungubwe on a fact-finding mission. According to Unesco's rules, industrial activity next to a World Heritage Site is forbidden.

Wallington said the company had spent R600-million establishing the Vele open-cast mine and he expected the court would find in Coal of Africa's favour.

"The decision on Vele will be a significant decision for the whole country. The opposition to the operations has been one-sided and I don't expect things to go wrong," he said.

However, Wallington added that the company would seek compensation from the government if things did not work out for it.

"We will try to recover whatever we can from the government. I have always publicly stated that one of the reasons SA is downgraded as a mining investment decision is uncertainty about the country's legislation," he said.

Steve Meintjes, head of research at Imara SP Reid, said there was nothing new about Coal of Africa moving into Makhado as the company has been talking about it "for quite some time". However, Meintjes said the delays at Vele would come at a cost to the company.

"Some time last year they were about to move into full production. Obviously the delay will be costly because if they are granted approval the regulator will put more restrictions in place."