Coal and iron ore company Exxaro plans to spend ZAR16.1bn ($1.4bn) on its Grootegeluk mine in Waterberg, South Africa, over the next five years.
The capital expenditure plan will begin with an investment of ZAR3bn ($265.5m) in 2015 and the highest amount of ZAR5.2bn ($460.2m) will be invested in 2017.
The increase in capex is part of Exxaro’s plan to fund a mixture of brownfield, greenfield and downstream coal beneficiation projects in Waterberg by 2019.
The capital will be used to expand production at Grootegeluk mine, develop new north and south phases of Thabametsi coal mine for semi-coke and market coke value-add plants and a 600MW phase one electricity generation coal-fired power plant.
The company will also use the amount for truck and shovel replacements, stacker-and-reclaimer and slime handling, an in-pit crusher, load-out stations and a rail line to push exports from Waterberg to the Richards Bay coal terminal port.
In collaboration with Transnet, the rail line will increase carrying capacity from the current two million tonnes (Mt) a year to 27Mt a year over the next five years.
Grootegeluk sold around 20Mt of coal and exported approximately 1Mt in the last fiscal year.
The entire coal output generated from the mine is supplied to the state’s electricity utility, Eskom, and municipal power stations.
According to Exxaro, produce from Grootegeluk and the Thabametsi coal mines are expected to reach 45Mt by 2030, where 35Mt will be for power stations, around 6Mt for export and the rest for domestic sale.