MC Mining has secured conditional approval from its directors to begin the first phase of development at its flagship Makhado hard coking and thermal coal project in South Africa.

In the first phase of work, MC Mining plans to start construction on the project in the third quarter of this year once all conditions are satisfied, and the company has raised the necessary funds of $33.5m.

Mining will start at the project’s west pit, and production is expected to be around 3 million tonnes per annum (Mtpa) of run-of-mine coal. The company will then focus on modification work at the mine’s Vele Colliery processing plant.

The modifications, which will facilitate the simultaneous production of hard coking coal (HCC) and a 5,500 kcal export quality thermal coal, will comprise a new fines circuit comprising of Reflux Classifier in series with the existing spiral plant.

Additionally, a low density secondary wash plant and a froth flotation plant to capture the ultra-fine coal will be installed.

The plant will produce about 1.1Mtpa of saleable coal comprising 0.54Mtpa of HCC and 0.57Mtpa of thermal coal.

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By GlobalData

Construction at Makhado and Vele will occur simultaneously and will take nine months to complete.

The company owns 69% of Baobab Mining & Exploration, which owns the Makhado Project, while the remaining stake is divided between the Industrial Development Corporation of South Africa, seven local communities and an industrial investor.

“The use of the existing Vele processing plant reduces the project’s capital expenditure requirements and shortens the construction time.”

MC Mining CEO David Brown said: “The use of the existing Vele processing plant reduces the project’s capital expenditure requirements and together with the completed FEED process, shortens the construction time while moderating execution risk.

“The company is in advanced thermal coal offtake discussions with various parties and expects that the marketing and fundraising elements will be completed in early Q3 CY2019.”

In January this year, MC Mining completed the purchase of the Lukin and Salaita properties, acquiring the key surface rights required for the Makhado project.