Coal of Africa Limited (CoAl) is ready to start Phase 1 of its Vele project after receiving a New Order Mining Right (NOMR) from the South African Department of Mineral Resources.

The phase includes the establishment of a modular coal treatment plant.

The treatment plant is expected to deliver an estimated one million saleable tonnes (yield dependant) of coking coal a year, with an annualised production target rate by the end of 2010.

Phase 2 is expected to deliver 5 mtpa of saleable coking coal.

The engineering, procurement, construction and management contractor will now begin the earthworks and civil construction of the modular plant, which will be transported by road from Cape Town.

A delay in receiving NOMR increased the total capital expenditure budget for Phase 1 from the original ZAR350m ($47m) to ZAR450m ($60m).

The formal execution of the NOMR also includes approval of the environmental management plan submitted as part of the NOMR application.