South African thermal coal producer Continental Coal on Thursday said that it remained on budget to start first production from Penumbra thermal coal mine, in Mpumalanga, with about one-third of the budget spent to date.
“The project is now 48.4% complete with a total forecast cost to complete of R329-million,” the ASX- and Aim-listed company said in a statement.
The current forecast is that the project will be completed with a R0.8-million cost overrun, mainly owing to geological conditions and higher tender prices; however it is fully funded from the company's existing cash resources.
First coal production is still forecast for end October, with a ramp-up to full production scheduled for June 30, 2013. The mine is set to produce 750 000 t/y of run-of-mine (RoM) coal beneficiated through a 1.8-million-ton-a-year coal processing plant at the Delta processing operations, as well as a 1.2-million-ton-a-year Anthra rail siding.
The Penumbra mine would be the company's third thermal coal mining operation in South Africa.
Meanwhile, the company reported that total run-of-mine production during July, for its Vlakvarkfontein and Ferreira thermal coal mining operations, was 175 783 t, a 2% increase on the average monthly ROM coal production achieved during the previous quarter.
Total thermal coal sales of 142 135 t for the month was a 1% increase on average monthly sales of 140 347 t achieved in the previous quarter.
The Vlakvarkfontein coal mine achieved RoM coal production of 138 068 t during July, representing a 16% increase on the average monthly RoM coal production achieved during the previous quarter.
Meanwhile, the Ferreira mine achieved RoM coal production of 37 715 t during July, 11% above budgeted production levels.
Edited by: Mariaan Webb