South African thermal coal production, development and exploration company Continental Coal, has begun producing thermal coal from its Penumbra coal mine in South Africa – which is its third operating thermal coal mine, but the first underground operation. First production has been achieved following extensive underground development activities by decline contractors Murray & Roberts, as the twin declines were advanced into a full face of the C-Upper and C-Lower coal seams.
The declines first developed into the C-Upper coal seam in mid-November 2012 and subsequent advances of the declines has now fully exposed the C-Upper and C-Lower coal seams. ROM coal has been stockpiled at Penumbra and is being hauled to the company’s Delta Processing Operations for processing through the existing wash plant. ROM coal production from development activities in the declines will continue as the first of two 14HM15 Joy continuous miners is commissioned ahead of commencing full scale underground mining activities in late November/early December. ROM production of 5,000 to 10,000 t for the December quarter of 2012 are forecast, ramping up to the targeted ROM production rate of 63,000 t/m by 30 June 2013.
The Penumbra coal mine has JORC compliant reserves of 5.4 Mt and total JORC compliant resources of 68.3 Mt. It is forecast to produce 750,000 t/y of ROM coal over an initial 10 year mine life at forecast average total FOB costs of ZAR 490/t (May 2011 terms), or about $57/t. The ROM production will be beneficiated through the existing and adjacent Delta Processing Operations, which comprises a 1.8 Mt/y coal processing plant and the 1.2 Mt/y Anthra Rail Siding.
Sales of 500,000 t/y of a high quality export thermal coal RB1 specification coal product are now forecast to commence this quarter. Construction and development activities at Penumbra are scheduled to continue through to June 2013, with additional underground shaft bottom development and the construction of the upcast ventilation shaft representing two of the key activities.