Resource Generation Ltd subsidiary Ledjadja Coal has signed three separate EPC agreements with CIMIC Group subsidiary Sedgman that will see the contractor carry out major work at the Boikarabelo coal mine in Limpopo Province, South Africa.
The three contracts cover design, procurement, construction, commissioning, operations and maintenance of the operation’s coal handling preparation plant (CHPP), plus the ancillary works relating to mine infrastructure.
The CHPP will be designed to handle 15 million tonnes of raw coal per year and, under the provisions of the operations and maintenance contract, Sedgman will operate and maintain the plant for four years after commissioning, “subject to strict performance criteria”, ResGen said.
The ancillary works is likely to involve construction of infrastructure associated with the CHPP, plus additional buildings, piping, electrical works, water and drainage during mine development.
Some 15 Mt of run of mine coal will be mined every year at Boikarabelo, but the company expects to produce 3.6 Mt/y of export product (25.7 MJ per kg on an air dried basis) and 2.4 Mt/y of domestic product (19.5 MJ/kg on an air dried basis).
Boikarabelo, in the Waterberg region of Limpopo, has 995 Mt of JORC resources and 267 Mt of JORC reserves. The mine requires a rail link to allow for exports, which is expected to cost R650 million ($49 million) in upfront capital, plus another R300 million during its ramp-up.
The value of the engineering design, construction and commissioning of the CHPP plant and the construction of the ancillary works infrastructure contracts is $210 million, while the operations and maintenance contract is valued at $100 million.
Grant Fraser, Sedgman Managing Director, said: “We are pleased to be able to deliver our whole-of-life approach to this important project – building the processing plant and providing ongoing operational involvement for Resource Generation, and its South African subsidiary Ledjadja Coal.
Papi Molotsane, Acting CEO of Ledjadja Coal, said Sedgman’s successful delivery of coal projects in southern Africa and the ability to wrap the contracts into lump-sum solutions were key to the contractor winning the work.
Work is expected to commence once the Boikarabelo project funding has been finalised, with debt providers currently in the final process of credit approvals, CIMIC said.