Exxaro Resources Approves New $357-M Coal Mine in South Africa

Exxaro Resources has announced the approval of a new $357 million coal mine in South Africa. The mine will produce coal for export and to supply one of the state-owned power utility’s plants.

According to the company’s press statement the project in the Mpumalanga province will “encompass one of the last high-quality reserves” in the region and “present Exxaro with an opportunity for excellent returns.”

The new mine is expected to produce an average of 2.2 million metric tons of A-grade export coal a year. The mine is forecasted to start output in the second half of 2017, the company said. A portion of the approved spending will only be allowed once Exxaro gets the necessary licenses and regulatory approvals.

The feasibility study for Thabametsi North Phase 1 will start in the third quarter and should be completed by mid-2015. The first phase of the project, which was first announced last year, will co-incide with the development of a 600-megawatt power plant being developed by France’s GDF Suez SA.

Based in South Africa, Exxaro Resources manages seven coal mines in the country and produces almost 40 million tons annually. The company currently supplies all the power-station coal it produces to Eskom.

Exxaro Resources announced last week it was expecting to see an increase in its thermal coal exports with estimates to be higher than the previous year.