Continental Coal advances third thermal coal mine, Penumbra Project in South Africa

Continental Coal (ASX: CCC) is making solid progress at the Penumbra Coal Project in South Africa, with site construction works currently being undertaken by the company’s South African subsidiary.

The project is the company's third thermal coal mine and is moving towards full production in third quarter 2012, and will contribute to Continental boosting its overall production by a further 750,000 tonnes of ROM coal annually.

The principal earth works contractor, Leomat, mobilised to site over the weekend of the 3-4 September 2011 and commenced civil and construction works on site on 7 September, with the initial ground breaking taking place in the proposed box-cut area.

Following site health and safety inductions that were completed with all staff and contractors on 5 September, the off-loading of all major earthmoving and support equipment in the contractors lay down area commenced on 6 September.

The site development and civils contract includes civil construction for all site development works and surface coal handling facilities.

It includes all earth works associated with the pollution control dam, security berm around the site and terrace for the site buildings, construction of the contractors lay down area as well as the access roads and associated stormwater drainage.

Don Turvey, Continental Coal CEO, said “this project is strategically very important to Continental Coal, as when we reach full production in third quarter 2012, it will see us increase our overall production by a further 750,000t of ROM coal production annually."

The forecast costs of the general site development works and surface coal handling facilities completed under the Leomat contract are ZAR14.5 million (US$2.1 million), with a further ZAR96 million (US$13.5 million) of forecast capital costs for completion of the decline development.

The company said a further ZAR116 million (US$16.3 million) of costs will be incurred in equipping of the two production sections with the continuous miners and shuttle cars or battery haulers.

In addition, the contract will also include all civil works for the excavation of the box-cut for the decline development. The contract will extend over an initial period of three months.

Development of the box-cut to a maximum depth of 18 metres is forecast to commence in October 2011 followed by development of the twin declines.

The declines will be developed at a 1:7 inclination from the high-wall and will proceed down to the C-Lower coal seam. The declines will have a length of 390 metres.

One of the declines will be equipped with a conveyor and the second serving as a trackless equipment travelling route. The declines will also serve as the ventilation intakes of the mine.

Two mechanised coal production sections are planned, each with a continuous miner, one section equipped with three shuttle cars, better suited to mid seam mining heights and one section equipped with battery haulers, better suited to low seam mining heights.

Each bord and pillar mining section will consist of nine roads, the centre road of which will contain the section conveyor.

Run-of-mine production from the Penumbra Coal Project is forecast to increase to the targeted annual rate of 750,000t in the third quarter of 2012.

The run-of-mine coal produced at Penumbra will be beneficiated through the existing Delta Processing Operations which comprises a 300tph coal processing plant and the 1.2Mtpa Anthra Rail Siding.

Production of 500,000tpa of a primary export thermal coal product is forecasted.

The export thermal coal product will be railed through to RBCT under existing rail contracts and sold to EDF Trading and other export off-take agreements.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/19496/continental-coal-advances-third-thermal-coal-mine-penumbra-project-in-south-africa-19496.html