Resgen’s LCL awards $310m contracts for Boikarabelo coal mine

2 August 2018 (Last Updated June 2nd, 2020 11:46)

Coal producer Resource Generation’s (Resgen) operating subsidiary Ledjadja Coal (LCL) has awarded three separate contracts, totalling $310m, to CIMIC Group’s mineral processing division Sedgman for the Boikarabelo coal mine in South Africa.

Coal producer Resource Generation’s (Resgen) operating subsidiary Ledjadja Coal (LCL) has awarded three separate contracts, totalling $310m, to CIMIC Group’s mineral processing division Sedgman for the Boikarabelo coal mine in South Africa.

The contracts cover engineering design, construction and commissioning, and operations and maintenance of the mine’s coal handling preparation plant (CHPP), as well as ancillary works related to the infrastructure of the mine.

“Sedgman has successfully delivered coal projects in Southern Africa and these contracts are in keeping with its execution strategy.”

The scope of the CHPP contract includes design, procurement, construction and commissioning of the CHPP that is expected to process 15 million tonnes of raw coal per year.

As part of the second contract, Sedgman is required to operate and maintain the plant for a period of four years following its commissioning.

Works to be undertaken under the third contract include construction of infrastructure related to the CHPP, in addition to buildings, piping, electrical, water and drainage during mine development.

LCL acting CEO Papi Molotsane said: “Sedgman has successfully delivered coal projects in Southern Africa and these contracts are in keeping with the execution strategy adopted by the board to minimise risk through the means of turnkey lump sum solutions with reputable EPC contractors and in parallel reduce the capital cost of the project.”

While the engineering design, construction and commissioning of the plant and the ancillary works contracts will fetch Sedgman $210m over 26 months, the operations and maintenance contract is pegged at $100m.

Sedgman will begin work once the Boikarabelo project funding is finalised.

Located in the Waterberg Coal fields, the Boikarabelo has estimated resources of 995Mt. The project will be developed as an open-cut coal mine, with annual production planned at 6Mt.