Resource Generation agreement secures water for Boikarabelo stage 2

Resource Generation (ASX: RES) has secured the water required for stage 2 of the company’s Boikarabelo mine, one of South Africa’s largest remaining coal deposits.

The Boikarabelo mine is located in the Waterberg region of South Africa, and has Probable Reserves of 744.8 million tonnes of coal on just 35% of Resource Generation’s tenements.

The agreement with the Lephalale Local Municipality in Limpopo Province, subject to a number of conditions, will see Lephale construct, operate and maintain a wastewater treatment plant at Marapong, about 50 kilometres from Boikarabelo.

Municipal effluent will be treated at the plant to generate up to 16 megalitres of water per day, which will be pumped to the mine site via a new pipeline.

Resource Generation managing director said the agreement, which was the result of two years’ cooperative work with Lephale, was another significant step in developing Boikarabelo.

“The plant will provide sufficient water to meet the medium and long-term needs of the mine, including after the stage 2 expansion; importantly it will also provide the local municipality with essential infrastructure and environmental protection. This is the first of many activities we will be undertaking for the Limpopo community.”

The agreement will provide Lephale with essential infrastructure; a key responsibility with Resource Generation’s black empowered subsidiary Ledjadja Coal committed to undertake in its social and labour plan for the mine.

Sufficient water for stage 1 of the mine is available from groundwater boreholes on the company’s existing properties. Use of this water is subject to an Integrated Water Use Licence, which was applied for in January 2011 and is expected to be granted soon.

Resource Generation ended the September quarter with $23.6 million cash.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/23283/resource-generation-agreement-secures-water-for-boikarabelo-stage-2-23283.html