Shumba to double Sechaba project capacity
Keikantse Lesemela | Friday October 3, 2014 06:00
Shumba coal has revealed that it would bring a 1.5mtpa coal mine by 2016, after which the mine’s capacity will be doubled to cater for a 300MW power station by 2017. “ The coal project has a clear future which consists of three elements which include construction of the mine before it is subsequently expanded by 2017.
A further expansion of the mine to produce and supply an additional two million tonnes per annum of thermal coal for export through South Africa. This will bring the mine capacity to 5 mtpa,” the company stated.
According to published results for the financial year ended 30 June 2014, Shumba Coal Group recorded a loss of 840,000 dollars compared to 312. 8 thousand dollars loss recorded last year. Commenting on the results, group chairman, Allan Glegg, said the company is committed to a low cost structure. “The group remains adequately funded to meet its planned expenditure requirements in the coming financial year,” he said.
Glegg however noted that Shumba had recorded a significant achievement in this period, considering the challenges in the markets, which include rising operating costs and project realisation estimates exceeding the market. He added that major current thermal coal exporters in established markets are loss making at current sport prices due to high cash costs exceeding 65 US dollars per tonne.
Shumba Coal was recently awarded a license for coal exploration rights in Letlhakeng. The license is for a three year duration. The company, which is also listed on the Mauritius Stock Exchange, is currently assessing the viability of exporting power from its proposed 300MW plant at its flagship Sechaba Energy Project (SEP) near Morupule.
A mining preliminary feasibility study has confirmed that it has the potential to economically produce quality thermal for domestic and export markets.
The project currently holds approximately1.1 billion tonnes coal resources. However, Shumba coal is now focused on low cost production for local supply in the short term, before it exports to world spot markets.
Following the completion of a 4,000 metres drill programme, Sechaba focused on delineating to higher accuracy.
There was a 19 percent increase in the reportable in-situ coal resources to 1.14 billion tonnes. Sixty seven million tones of new measured resources were also delineated. The indicated resources increased by over 70 percent to 194 million tonnes.