Sasol, Exxaro in coal joint venture
2 July 2009
Exxaro has entered into a prospecting joint venture agreement with Sasol Mining for the development of a new coal mine, the diversified resources company said on Wednesday.
The mine was intended to supply Sasol's potential inland coal-to-liquids (CTL) project, Exxaro said in a statement.
"Project Mafutha is an investigation into the development of another CTL project in South Africa and is envisaged to be located in the north-western part of the Limpopo province due to the substantial coal reserves in the Waterberg region."
Should the project proceed, it would require a new coal mine to produce feedstock for the 80 000 barrels-a-day CTL complex.
"The development will help meet the growing shortfall in South Africa's domestic fuel production, most notably in the installed capacity for producing diesel and petrol."
In recent years, South Africa had been a regular importer of refined fuels to supplement local production. It was expected that such a mine would require an open cast truck-and-shovel extraction method, an area in which Exxaro had expertise.
"The development of the new mine is in the pre-feasibility stage with the mining of a bulk sample planned for before the end of 2009."
It was expected that some 170 000 tonnes of coal would be mined for large-scale testing at the Sasol's Synfuels Secunda plant.
Exxaro said its participation in the joint venture for the new mine was subject to the applicable regulatory approvals, the company's continued interest in the project and development of the CTL and associated Mafutha coal mine.
Exxaro is represented in the mining joint venture by Exxaro Coal Mpumalanga (formerly Eyesizwe Coal) a wholly-owned subsidiary of Exxaro Coal.
Sapa
