Seriti opens 25-year underground extension at Mpumalanga coal mine

In a week when political leaders weighed the consequences of extending the life of some of SA’s coal power stations, one of Eskom’s largest coal suppliers showed confidence in the future of the commodity by extending the life of one of its mines by 25 years.

Coal miner Seriti on Friday hosted a “first sump” ceremony as it broke ground on a project to switch from opencast to underground mining at its Klipspruit colliery near Ogies in Mpumalanga.

Seriti CEO Mike Teke said this will help maintain present production and export levels from the Klipspruit colliery in future.

The mine has an average run of mine production of 8.5-million tonnes a year and planned production from the underground operations amount to about 4.5-million tonnes a year. This is what is needed to meet the mine’s overall tonnage requirements.

The new underground section was expected to reach full production by the third quarter of this year, or the first quarter of 2024 at the latest.

The total resource was estimated to be about 600-million tonnes with about 30% of the resource in inferred status.

The decision to start mining underground was taken as it had become uneconomical to continue opencast mining at the site. By switching from opencast to underground mining the life of mine for the Klipspruit colliery will be extended up to 25 years.

Teke said that while “multinational mining companies in SA were under pressure to exit coal” Seriti believed coal mining still had a long future in SA. The company would continue to invest in the development of its coal assets.

“We are not against renewable energy, but we believe coal-fired power stations will continue to operate alongside renewables to provide baseload,” said Teke.

In 2022, Seriti concluded a R892m deal to acquire a majority stake in Windlab Africa’s portfolio of 4GW wind and solar power assets through its subsidiary Seriti Green.

Klipspruit GM Dirk Miller told Business Day that the mine was set to last until about 2036, but because they were already mining so deep it became extremely expensive to operate.

“The mine needs to operate as a going concern even at a relaxed coal price. We needed to set it up so that in depressed pricing times we can still make money from the mine. That is why we decided to go underground — because in this case underground [mining] is substantially cheaper than opencast mining because of the depth of the mine,” Miller said.

The miner produces two products. One is a high-quality, low ash coal exclusively for the export market. The other is middlings coal, some of which Seriti hopes to sell to Eskom pending the outcome of talks.

Miller said that from opencast mining they could achieve a yield ratio of 28%-32% high-quality coal, but in the underground section they expect the share of high-quality coal to rise to about 42% of the total yield.

The project is fully self-funded through capital spend of about R1.4bn, he said.

Mineral resources & energy minister Gwede Mantashe, who attended the “first sump” ceremony for the mine, said this showed the market expected  demand for coal to continue for many years.

“Coal will be here for a long time and it will perhaps [be part of the future] permanently if we invest in [clean coal] technologies,” said Mantashe.

“When you are opening a deep mine that will last for at least 25 years, what you are saying is there will be [a market for coal] in 25 years. The reality is coal is needed [now and in future].”

erasmusd@businesslive.co.za