Metals and mining company Kumba Resources is to spend R411-million on two new local projects as part of its plans to expand its coal business.
Kumba executive Trevor Arran said the projects at the Grootegeluk and Leeuwpan coal mines, in Limpopo and Mpumalanga provinces respectively, would also mitigate the effect of job losses announced within the group as part of the business
improvement plan.
The group earlier this month said up to 400 people could lose their jobs in the shake-up.
”Some jobs will be migrated. Over and above that, we will be creating some 70 new jobs. These do not include contractors — we use contractors at all our projects — or the construction phase, which will generate a large number of temporary jobs. We have not defined the quantum of those jobs at this stage,” said Arran.
”We are adding jobs rather than subtracting them.”
”It is really significant for the mining industry to announce projects with the rand as strong as it is. Not many mining houses are announcing projects at this stage. The amount of taxes we will be paying is also not insignificant.”
The new R320-million beneficiation module at Grootegeluk will generate 0,7-million tonnes per annum (mtpa) of semi-soft coking coal for supply to Ispat Iscor, which announced last week that it is to construct a new coke battery at its Newcastle plant to manufacture coke for the expanding domestic market.
A 10-year agreement has been concluded to supply Ispat Iscor with the product at a market-related price.
”The Grootegeluk project is expected to be completed by July 2006 and will increase Grootegeluk’s semi-soft coking coal output to 2,5 mtpa. It will reinforce the mine’s position as the world’s largest coal beneficiation complex,” said Ernst Venter, Kumba’s coal business general manager.
Kumba will invest R91-million to expand production at its Leeuwpan coal mine near Delmas by 60%, boosting output from 1,7 mtpa to 2,7 mtpa. The expansion is due for completion by June 2005.
A jig plant will be constructed at Leeuwpan to supply Eskom with an additional one mtpa of power station coal for its Majuba power station.
The combined growth in sales tonnage from the Grootegeluk and Leeuwpan projects will amount to 1,7 mtpa, increasing Kumba’s total coal production to 21,7 mtpa.
The South African developments follow last week’s announcement that Kumba has signed a ”Heads of Agreement” with Anglo Coal Australia that could lead to the development of a major coking coal mine in the Bowen Basin of central Queensland. – Sapa