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Menar coal projects, South Africa – update

Image of the Phalanndwa mine

Photo by Menar

11th October 2024

     

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Name of the Project 
Menar coal projects.

Location
Gauteng, KwaZulu-Natal, and Mpumalanga, in South Africa.

Project Owner/s
Menar, through its subsidiaries Kangra and Canyon Coal. 

Project Description
Menar, through its subsidiaries, will have the capability to produce almost 20-million tons of coal a year from 2025 onwards.

Several projects are proposed, including:

  • the Bekezela project, near Springs in Gauteng, at which Menar is scheduled to produce 600 000 t run-of-mine (RoM) a month. This megamine is expected to be Menar’s flagship opencast operation. At the scheduled production volume, the estimated life-of-mine (LoM) for Bekezela is roughly 22 years. 
  • the Thuso underground coal project, north-west of Bethal, in Mpumalanga, which has a scheduled LoM of ten years, based on an average RoM production of 110 000 t a month.
  • the Sukuma opencast project, in Vereeniging, Gauteng, with an LoM of 30 years, based on a RoM production of 600 000 t a month.
  • the Gila underground project, in Bethal, Mpumalanga, with a scheduled LoM of 15 years, based on a RoM production of 150 000 t a month.
  • the Umzila underground project, in Hendrina, Mpumalanga, with an LoM of 20 years, based on a scheduled RoM production of 200 000 t a month.
  • the Umgala underground project, located about 4 km south of Utrecht, KwaZulu Natal, is planned to produce an average of 200 000 t a month, which translates into a scheduled LoM of ten years. 

Kangra’s Kusipongo reserve consists of 41.9-million tons of RoM, which is being mined from the Udumo and Uthingo (formerly Balgarthen) shafts. The strategic design of the Uthingo shaft ensures Kangra's ability to maintain production levels and profitability, even in challenging market conditions. Moreover, this shaft will later facilitate access to the adjacent T4 project, further expanding the LoM of the mining operations at Kangra.

Coal reserves have been depleted at Phalanndwa Colliery’s main opencast operation and Phalanndwa Colliery’s extension. The mine has started rehabilitation at the extension and is due for completion by November 2024, after which rehabilitation will take full effect at the main operation.

Potential Job Creation
The Menar projects are expected to create about 2 400 direct job opportunities, which consists of about 800 at the Bekezela project, 200 at Thuso, and 800 at the Sukuma opencast mine. Umgala will create a further 600 jobs. 

Khanye Colliery, an operational opencast mine in Gauteng, employs 700 people including contractors. 

Gugulethu currently has 400 employees inclusive of contractors. The mine will employ 430 employees once it reaches full production. 

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
Menar plans to invest about R7-billion in coal projects leading up to 2026, including R1.5-billion at Bekezela, R600-million at Gugulethu for Phase 1 (already spent), R1.5-billion at Sukuma, R700-million at Thuso, R1-billion at Umzila and Gila, and about R800-million at Umgala. 

Planned Start/End Date
Gugulethu started producing the first RoM on January 26, 2024.

Subject to market conditions, Menar envisages to start with the development of the Bekezela and Thuso collieries during the first quarter of 2025. Both projects are fully licensed and the surface rights have been secured. 

The Sukuma, Umzila, Gila and Umgala projects are expected to start production in 2026. 

The start dates for these projects, however, are subject to regulatory approvals and coal market conditions.

Latest Developments
Phalanndwa has embarked on a robust mine rehabilitation project. The rehabilitation, which started in March 2024, is scheduled to be completed by November 2024 for Phalanndwa Extension. To date, 420 026 m3 of backfilling has been completed.

Key Contracts, Suppliers and Consultants
Kangra:
Komatsu-Joy Global; J.A. Engineering; Andani Mining Services; Coalseam Hydraulics; Sandvik; Conax Machine Solutions; Continental Conveyors; Fenner Conveyor Belting; Maxam Dantex; Kennametal; Cincinnati; Gilberts; Barloworld; MumNkosi Project & Services; Zama Phangwa Construction; Macina Building & General Maintenance; Mgquzeni Mining; Donkerhoek Mining Projects (DMS); DDK Logistics; Tsakane Health & Safety and Ngwenya Minerals & Processing.

Canyon Coal:
Volvo; CAT; Bell; Komatsu; Mbalenhle Tours And Construction; Dube Solution; Grapeseed Trading 102; Golden Reno Trading and Project; Kungwini Mica; Mulwane Investments; Nduzane General Trade; Phoka Goje Transport and Services; W Masuku Transport and Projects; Summer Triangle Trading; Madlayedwa Transport; Mrholozi Group; Sesupha Solutions; Kgaditse Prestige Events; Ndimande Logistics and Transport Mancamane Trading Enterprise; SSW Signs & Reflective; Malele Hydraulics; Malefo Mining services; Nkosana Sizwe Trading Enterprise; 1st Episode Trading; Two Mosquitos; Road Science Technology; Armoured Enterprise; Amandla Mining Service; Starcrow 36; Buhlebuta Business Enterprises; Afikile Construction; NTT Toyota Delmas; Maphangela; Bakone Bakopane; PTM Trading; Khethowakho Trading & Projects; Inelco International; Xclusive energy; BMG Delmas; Morgan Gift; Enhle projects; MTN; Huawei; Minetec Smart Mining; CNNC Trading; AECI Mining; Akani Plant Hire; Skhomo Group; Blu Line Group; Techpioneers; Precon Survey Services; Ingwenya Mineral Processing; Mineral Processing Technologies; Ronewa Analytical Laboratory; Sheqman Solutions t/a SA Mineral Laboratories; GFK Consulting Engineers; Lelethu and Co; Zuva Mining; Bakamoso; Pentalin Processing; Safety and Training Solutions; CTC-Colliery Training College; Godrich Motors; M2 Environmental Connection; Openhouse Management Solutions; Tsakane Health & Safety; Life Care Response Emergency Medical Service; and Khisani Projects.

Contact Details for Project Information
Menar, tel +27 11 783 7996 or email info@menar.com.

Edited by Creamer Media Reporter

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