Tag Archives: MC Mining

MC Mining looks to China for Makhado coal project construction and capital

MC Mining has signed heads of agreements with Chinese construction enterprise China Railway International Group Co Ltd that could see the firm finance and carry out the construction of the coal handling and processing plant for the Makhado project in the Limpopo Province of South Africa.

Under the terms of the HOAs, MC Mining and CRIG have agreed to negotiate a package that comprises the engineering, procurement and construction (EPC) for Makhado’s plant, financing for 85% of the EPC costs, and contract mining operations.

Makhado is envisaged as 12.6 Mt/y run of mine open-pit coal mine yielding 2.3 Mt/y of hard coking coal and 3.2 Mt/y of thermal coal for domestic or export markets. In the company’s latest interim results presentation, MC Mining pegged the construction capital and period at $79 million and 12 months, respectively,

The HOA agreements with CRIG are conditional upon the final terms and conditions being signed by June 2019. This includes completion of the Makhado front end engineering and design study and agreement on the EPC contract price by both parties, as well as appropriate funding provided on acceptable terms.

“The development of the Makhado project is expected to facilitate economic growth in the Limpopo province and the company will keep the market appraised on further progress with regards to the ongoing discussions with CRIG,” MC Mining said.

Offtake discussions for hard coking and export thermal coal production from Makhado are currently ongoing with various parties, it added.

The agreements follow swiftly on the heels of MC Mining receiving a positive ruling from local and national regulators in relation to the project’s Environmental Authorisation.

MCM acquires mining equipment at Uitkomst coal operation

MC Mining is transitioning to owner-operator at its Uitkomst coal mine in KwaZulu Natal, South Africa, after agreeing to buy all of the mining equipment from former contractor, Khethekile Mining.

Under the terms of the R65 milion ($4.9 million) deal, MC Mining’s Uitkomst subsidiary will acquire Khethekile’s mining equipment, including conveyor systems and coal mining and transportation equipment, and take on some 340 Khethekile employees working at the mine and at Khethekile’s Newcastle offices.

Uitkomst, which MC Mining acquired in June 2017 as part of a R275 million deal with Pan African Resources, has a remaining mine life (including extensions) of approximately 16 years.

MC Mining said: “The insourcing of underground mining operations at Uitkomst is an opportunity to progress the overall performance at the colliery and facilitates the implementation of a number of initiatives, including enhanced control of production costs as well as improved asset availability leading to increased run-of-mine (ROM) coal production.”

The mine produces high-grade thermal export quality coal with metallurgical applications and consists of an existing underground coal mine (Uitkomst – South mine) and a planned life of mine extension into the northern area (Klipspruit – North mine).

The deal includes a cash consideration of R16.4 million and the assumption of the face value, as at August 1, of loans, trade payables and accrued expenses, together totalling R48.6 million.

The direct control of Uitkomst mining operations is expected to result in a steady increase in output, and the mine is expected to exceed production levels seen during the 2018 financial year to end June (505,130 ROM) during its next financial year.