Ikwezi Mining, the South African company engaged in development of coal projects in the KwaZulu Natal, Limpopo and Mpumalanga regions, has started mining operations in its Ntendeka Colliery.
The colliery developed under the title of Newcastle project is located in Northern Kwazulu Natal, and has a JORC compliant resource of 294 MnT of coal.
The coal project has reserves of export grade thermal coal which could also be supplied to the local market in South Africa. A coal wash plant of 2.1 MnT per annum capacity has already been commissioned under the project.
A coal wash plant removes more waste material from the coal, which increases its market value and lowers transportation costs.
Market reports have informed that Ikwezi will initially ramp up by selling run of mine (ROM) coal, but once production would stabilise, the company will evaluate the option of bringing the coal wash plant into operation, along with acquiring rail and port access.
Commenting on the start of mining operation, officials from Ikwezi mining have said the API-4 coal index remained in a price range that supports the commencement of mining and should place the operation in a position to start generating cash from its operations.
The API 4 price assessment is the benchmark price reference for coal exported from South Africa’s Richard Bay coal terminal.
South African Coal Offers:
South African coal index has extended its stay on the higher side this week, assessed at USD 101.35 for Oct’18 as on 28 Sep’18.
However, a persistently high index price has compelled the coal miners to raise the discounts in order to attract the buyers.
South African 5500 NAR coal was offered at a discount of USD 21-22/MT, while discount on 4800 NAR was heard at USD 31/MT. 5500 NAR coal price was assessed at USD 91-92/MT, CFR East Coast India.
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