On October 11, 2005, the chairperson of Petra Mining Limited (Petmin) – a junior JSE-listed black economic-empowerment (BEE) company, Piet Nel, and a senior representative of the Mpokunyoni Tribal Authority, BB Mkhwanazi, turned the first sod on the site of the new washing plant at what will be the Somkhele anthracite-mine.
Somkhele, situated about 20 km west of the town of Mtubatuba, will require capital expenditure of R114-million.
This is the first greenfields anthracite-mine that has been opened in South Africa for more than a decade, explains Mark Snelling, the CEO of Springlake Holdings, a Petmin subsidiary that will manage this mine.
Snelling points out that there have been a couple of small anthracite operations in Kwazulu-Natal that have started only to close after a short time and several old mines have been resuscitated with varying success.
“In fact, there was a mine near Somkhele, which started in 1903, to supply the new sugar-milling industry, however, it was short-lived.
The Zululand Anthracite Colliery (ZAC) was the only mine to be established in the area back in 1985.
Snelling, a mining engineer, has had a long association with Somkhele as, in 1984, he was employed by JCIm, which was exploring the Somkhele area.
Historical data, some of which dates back as far as 1969, that was of adequate quality from companies such as JCI, Mining Corporation and Fuel Research, have been collated.
Over and above that, Petmin’s Nel spent considerable time working on the Somkhele deposit for Southern Sphere and later Mining Corporation.
“Very substantial amounts of money were spent by all the major mining houses on exploration in the Nongoma area during the 70s and 80s,”explains Snelling. Much work has been carried out on the Somkhele deposit in the last couple of years under the auspices of the former owners AfriOre and today under the direction of Petmin. Currently, the mine has some 80-million tons of anthracite in resource in the limited areas that have been investigated so far.
“What has been achieved is that the existing resource tonnage has not increased. However, the reliability of and confidence in the data has been improved to categorise a significant portion of the tonnage into the proved reserve and measured resource categories,” Snelling explains.
The reserve and resource estimates on the current drilling have been carried out by Dave Grant from Applied Geology. Snowden Mining Consultants, which earlier this year completed an independent competent persons report (CPR) on the area, has been requested to review the latest results and to amend its independent Samrec-compliant statement accordingly. Petmin is confident that the resource tonnages will be considerably increased over the next couple of years as the company turns its attention to strike extensions of the current reserve areas.
The fundamental geology that has been carried out by Grant and his team from Applied Geology, has extended the total known sub outcrop strike from about 6 km to some 36 km of coal exposure. The anthracite has been faulted out of its obvious locations and Grant evolved a model from which reliable predictions to trace the deposit could be made.
Early exploration work was carried out using ordinary core drilling. However, because of the fractured nature of much of the coal owing to tectonic shifts, much of the coal tended to have a large core loss of fines to the point where the average core recovery was as low as 80%.
Subsequently, by introducing a technique known as triple-tube core drilling, nearly 100% of the coal-seam samples was recovered.
What was previously being lost was the naturally-occurring fines, very high-quality pure vitrinite material that is so well suited for the titanium industry. Drilling is continuing to extend the reserve base of the future operation as marketing studies indicate a higher than anticipated demand.
As the geology is complex and the seam very thick, the drill spacing, carried out on a40 m dip by 80 m strike grid, has been tight. This has allowed Springlake to determine that a number of ‘mini-pits’ will be the best way of mining Somkhele.
What is remarkable is the organic quality of the anthracite, which has a 90% vitrinite content.
The sulphur content is 0,6%to 0,7% while the contained phosphorus is less than 0,01% for some products and less than 0,02% for others.
The suitability for the local market, whether it be in ferromanganese, ferrochrome or silicon manganese, is excellent, explains Snelling.
In terms of maturity, Somkhele anthracite is compatible with its sister mine, Springlake Coal, should the need to blend arise. Somkhele anthracite is younger than that mined at Springlake. However, geological transformation has given the coal the quality of an anthracite.
Although there are various seams, the main economic target is what is known as the ‘B’ or Main Seam, which is consistently more than 12 m thick, dipping at 22° to 24°.
The Somkhele Project is divided into separate areas by a number of sub-parallel faults. Work on what is termed Area Two has yielded some 2,7-million proved opencast tons, which, at a mining rate of 40 000 tons a month, will provide for seven years of low-cost mining.
At present, work is progressing on the larger Area One, where Petmin expects close-spaced core-drilling at least to triple the current open cast reserves. Current indications are that this target will be exceeded. The current focus is to definitively delineate the opencast mineable reserve tons and quality. All exploration has been carried out to fulfil the conditions of the Samrec code and the similar Canadian reporting standards.
In the even-larger Areas Four and Five, the resources, which still have to be translated in to reserves, are considered to have huge potential.
A bulk-sample box cut was mined some two years ago, the results of which were announced in the first quarter of 2003.
The main seam package is approximately 15 m thick and the thickness of anthracite is about 12 m, excluding partings. “The Somkhele mine is anticipated to produce metallurgical products at a competitive cost and be a strong revenue earner for Petmin,” explains Snelling.
Currently, the company expects to bring a modest Somkhele production tonnage to the market by the end of 2006.
The underground resource is extensive, and could be mined very successfully, but, at this time, this has not been consider-ed in the current opencast life-of-mine plan of 17 years.
This is based on production of 500 000 t/y. However, depending on the market, this could be raised to one-million tons a year run-of-mine (Rom).
The yield from the Rom will be about 65%.
In terms of infrastructure, Petmin and its predecessors started with negotiations into the integrated development plan some five years ago and the starting of the mine is also linked to the development of the Umfolozi corridor, which is a government poverty-alleviation scheme.
That corridor started with the tarring of roads and also the provision of water and increased power to the area.
The Somkhele Project will be able to link into that infrastructure as a base client to provide a base off take for power and water.
In addition to that, Somkhele will be building limited service roads and will be party to maintaining the infrastructure.
The first phase of the operation is linked to existing consumers within a hundred kilometre radius of the mine.
Petmin is hoping to conclude agreements with the titanium smelters near Richards Bay, and Petmin is also in negotiations with a number of the large ferrochrome producers, particularly in the Eastern Limb.
Petmin is also looking at other options into Richards Bay, which will not necessarily involve the coal terminal.
Regarding the community, Springlake inherited the Somkhele Project from Purity and JCI, both of which had operated in this area.
Since inception, Springlake has always involved the local community in its endeavour to contribute to the upliftment of the local community.
“We have formed a relationship with the tribe and they have a subcommittee of elders and councillors who form the MMC, the Mpokunyoni Mining Committee, which is fully empowered and enfranchised to make decisions on behalf of the tribe,” explains Snelling.
“They were elected by a constitutional vote of about 800 people early in the project and have remained with us ever since.
“We provide facilities, such as transport, telephones and office facilities, to them so that they can carry out their duties.” Springlake does not deal directly with the community, but rather deals through the MMC and each of the councillors, who, in turn, deal directly with the people in their constituency area.
The employment opportunities created by the mine in this economically-depressed region are significant.
During the construction phase, employment will peak at about 200 jobs, of which Petmin would like to have at least 60% coming from the local community.
Over and above that, the directly-affected community has the first right for all other jobs.
Petmin has created a labour desk through the MMC where suitable candidates are put forward and then interviewed and employed as needed by the relevant contractors.
The 200 temporary jobs will eventually be reduced to about 120 full-time jobs, which will include the operation’s plant and opencast mining contractors. A condition of contract award is the employment of local labour.
Initially the mine will be a single-shift 40 000 t/m operation. However, if this is successful, Somkhele may well double this, which will possibly add another 60 jobs.
To manage the civil engineering design and contracting, Petmin approached Stemele Bosch Africa, a company well suited to the task, as it has done much work in the Richards Bay area as well as in the local rural communities.
The company has been successful in using labour-intensive methods needed for the underdeveloped local economy.
The plant is being project-managed by Senet, a Johannes-burg consulting-engineering company that has seen rapid growth over the last couple of years.
In addition, the Somkhele Project team used the services of consultant Dave Peatfield, an expert in the design and operation of process plants.
The plant cost, including design, is some R56-million,which is more expensive than might be expected, says Snelling. A cheaper drum plant does not give the flexibility to fully serve the anthracite market, explains Snelling.
The intention is to install a heavy-media washing plant, which will involve cyclone washing, drum washing and spirals.
The key to the whole design is total flexibility, allowing Somkhele to produce a complete range of products by batch washing and also from steady-state design in both primary and secondary washes.
In this design there is flexibility to produce a range of products both in size, ash content and quality, a factor that is vital to success in the anthracite business.
The plant civils were started at the turning-of-the-sod ceremony, which involved some850 of the local people and dignitaries as well as all the contractors.
The plant will be completed in October 2006 and it is planned that commissioning will be completed by early 2007.
Mining will start three months prior to plant commissioning to build up a stockpile for processing and establish a pre-strip.
The mining contract will be awarded in March next year. However, Snelling explains that this is not normal coal mining as the dip is 22° and, as there are a number of subseams within the seam, the mining will have to be selective on apparent dip.
Leomat Construction has the contract for the earthworks construction, a contract that is valued at more than R10-million. This company will be building the access roads and the plant platforms, dams for fresh water and dams for recycling and evaporation.
© 2009 Petmin Limited