CoAL to cut staff, close Vele again
Troubled operation shut for second time as it invests another R220m in an ‘expansion’
COAL of Africa (CoAL) has shut down its troubled Vele mine again as it invests another R220m in “expansion”, aimed at getting the mine to do what is was supposed to from the outset.
COAL of Africa (CoAL) has shut down its troubled Vele mine in Limpopo for the second time as it invests another R220m in a socalled “expansion”, aimed at getting the mine to do what it was supposed to from the outset — produce about 1-million tonnes of coal annually.
The mine will be closed until the end of next year, resulting in 155 retrenchments, while 138 employees have been redeployed to other operations and 49 have been retained.
When the construction of Vele was announced in early 2010 the then CoAL management team — led by chairman Richard Linnell and MD Simon Farrell — said Vele would be developed in two phases, with construction of “a modular coal treatment plant with the ability to deliver an estimated 1-mil- lion saleable tonnes (yield dependent) of coking coal per annum”.
The mine then ran into a wellpublicised confrontation with the environmental authorities, during which it was shut down in August 2010. Vele restarted production in December 2011 and railed its first coal for export in April last year, at which point the target of 1-million tonnes per year of coking coal output was restated.
But the subsequent production statistics show that Vele produced just 46,066 tonnes of saleable thermal coal in financial 2012, rising to 149,690 tonnes of saleable thermal coal in financial 2013. Also, that coal was produced at very poor operating efficiencies. Vele had to treat 162,289 tonnes of coal last year to produce the 46,066 sales tonnes, indicating a recovery efficiency of 28%.
Plant efficiency should improve with greater throughput, but that did not happen this year when 519,718 tonnes were treated to yield the 149,690 sales tonnes, at a recovery efficiency of 28.8%.
The obvious conclusion is that the plant is not working. To put it bluntly, it appears to be a dud.
When that assessment was put to current CoAL CEO David Brown he replied: “I don’t think that would be an oversimplification of the situation.”
He pointed out that a particular operating problem has proved to be the brittle nature of the coal, which resulted in a lot of the value going into the “fines” produced, which the plant was not able to recover.
The latest plan is to modify the Vele processing plant so that it will be able to simultaneously produce two products: a semi-soft coking coal and a thermal coal product.
Facilities will be added to enhance the recovery of the coking coal fine fraction due to the high quality of the finer-size fraction nature of the coal.
Mr Brown said CoAL would look to raise the R220m through project funding and hoped to finalise this by the end of March.
He added: “Completion of the expansion is expected by the end of 2014. Thereafter, the colliery will begin to ramp up operations during 2015.” Full production will be an estimated 1.1-million tonnes of saleable coal, to be produced from 2.7-million tonnes of run-ofmine production, which implies a plant recovery efficiency of 41%.