Modern Mining October 2015

COVER STORY

Kelvin power station in Johannesburg (which is currently only producing about a third of its 600 MW design capacity). “If this comes off, ultimately we could see Nsele also supplying coal to Kelvin, which is only about 70 km from the mine,” he says. Van Niekerk notes that the contract with MCC was negotiated. “We could have gone out to tender but we’ve had a relationship with MCC which goes back to 2007, when we were talking to them about possible contract mining at an iron ore project we had in West Africa. We liked what we saw of the company then and we’re absolutely confident that we’ve made the right choice in selecting MCC as what is, in effect, our mining arm.” Looking at the project from MCC’s perspec- tive, Colling says that while MCC wins much of its work on open tender, it prefers to negotiate. “The reason for this is that we believe we can add a great deal of value to any open-pit mining operation and that the best way to realise this value is via negotiation and, preferably, early involvement in the project,” he observes. “Our goal is to become a partner of the client rather than simply a service provider and to totally align ourselves with the client’s objectives. Certainly we’re extremely proud of the fact that MCC will not only move the tonnage at Nsele but virtually act as DMC’s mining department, handling every aspect of the mining operation.” While the final fleet to be utilised at Nsele has not yet been finalised, Colling says that it will probably include at least one Liebherr R9350 excavator, a 350-ton machine, as well as a fleet of 150-ton payload dump trucks, on the overburden and interburden with Liebherr R984s working in conjunction with 100-ton dump trucks being used to mine and haul the coal. Nsele will join a portfolio of seven other con- tracts that MCC has, which are spread through South Africa, Botswana and Mozambique. The biggest of these is the Benga mine near Tete in Mozambique, where MCC has been working since 2011. Volumes on the contract have been cut in recent months from roughly 2 million cubes a month to 1,6 million cubes a month because of market conditions. Says Colling: “This resulted in us having over-capacity on site but fortunately we have been able to rent out some of our machines, including our big 650-ton Liebherr 996 excavator, the biggest unit in our fleet, to the neighbouring Moatize mine. We believe this is a relationship which could grow. We’re in negotiation with our client ICVL on a possible extension to our contract at Benga. If that doesn’t come off, then there is the

of this transaction but, suffice it to say, the acquisition of DMC by Sable was not really a success. The net result was that Rietkuil remained on the backburner for several years, although a full feasibility study was completed in 2011. Earlier this year I reacquired control of DMC and we’re now moving at full speed on Nsele. We’re currently updating the feasibility to reflect the fact that we’re now planning to produce thermal coal for local use rather than export product. The project has had its mining licence in place for several years and all we’re now waiting for in terms of permitting is our water use licence, which we’re expecting immi- nently. We’re also negotiating with Eskom on an offtake agreement and these talks are going very well. If, by any chance, we don’t secure this agreement, we will still go-ahead with the mine, as there is a ready market for the prod- ucts that Nsele can produce.” Nsele is currently a ‘virgin’ site, which raises the question of how the coal will be processed. “We estimate that it will take us about eight months to build a single wash modular plant and we’re in advanced negotiations with two companies who specialise in the design and construction of plants of this nature and who both have an excellent track record,” says Van Niekerk. “Since we’ll start mining before the plant is operational, we’re looking – in the interim – at either selling our product to one of our neighbours who would then undertake the processing or, alternatively, toll treating at a neighbouring operation. We’ve spoken to a couple of our neighbours and both these approaches are entirely feasible.” He adds that one of DMC’s divisions, DMC Energy, is presently negotiating to acquire

MCC’s giant Liebherr 996 shovel, seen here at the Benga coal mine in Mozam- bique, is now operating as a rental unit at the neighbour- ing Moatize coal mine.

20  MODERN MINING  October 2015