Chairperson’s View | Edition 008
Vuslat Bayoglu - Executive Chairperson
The first half of 2021 saw strong mining and plant processing tonnages at our operations. Khanye Colliery, our operation under Canyon Coal stable, has reached steady-state production with on average over 200 000 tons of coal per month being mined and processed. The coal is also being produced in line with customer specifications.
The only challenges Khanye has faced are logistics-related. Transnet Freight Rail has experienced difficulties in providing trains to rail our product to the Richards Bay Coal Terminal, in KwaZulu-Natal. Capacity constraints on the rail network pose a major challenge to all our operations. To mitigate this challenge, we have had to move our product to other sidings.
In 2019, Canyon Coal completed the development and construction of the Bronkhorstspruit Siding, which is located approximately 8 km from Khanye Colliery. The siding was built to reduce the distance of the coal truck deliveries to the siding substantially and coal evacuation costs. The R12.23 million investment brought benefits to the local community. The siding uses local business products, services, and labour from surrounding communities.
However, owing to a shortage of trains at the Bronkhorstspruit Siding, we have had to make use of the Oosbank Siding, approximately 54 km away in Emalahleni. This adds to both the costs and delivery times to the port. And while this has helped us get coal to the port, we still are experiencing challenges in receiving trains at the Oosbank Siding.
Phalanndwa Colliery and Phalanndwa Extension, also under Canyon Coal, experienced difficult times toward the end of last year and earlier this year because of some washout areas, which refers to geographical areas where there is no coal. Nonetheless, Phalanndwa overcame these challenges and is currently mining over 120 000 tons a month of the run of mine coal and processing similar volumes as well.
But Phalanndwa is also facing logistics challenges as the nearest siding of Kendal is not operational. Therefore, we have had to make use of the Oosbank Siding, around 75 km away. These add to the cost of doing business, hinders productivity and profitability. The situation has to be rectified urgently by Transnet and the relevant authorities as it is negatively impacting all mining companies.
Meanwhile, a recent drilling campaign discovered a new reserve of over 5 million tons at Khanye Colliery, which will extend the life of mine by another two and a half years. This is great news for the mine and for employment opportunities. De Wittekrans, a reserve in Hendrina, is now fully licensed and we are currently negotiating with the surface right holders to be ready to start the operation later this year.
Then at Ukufisa Colliery, we are undertaking a feasibility study about washing the coal on-site, instead of transporting it to Phalanndwa for processing. The feasibility study is scheduled to be completed soon and then after that, we will know if it is feasible to process the product on the property.
We continue exploration and development work on our pipeline of new projects to stimulate job creation, procurement opportunities for local communities, implement community development projects and business development initiatives, which form part of our social and labour plan (SLP) and local economic development (LED) requirements.
