Operating collieries

Vanggatfontein Colliery

Vanggatfontein Colliery

Vanggatfontein

Key facts

Ownership

  • Keaton Mining Proprietary Limited

Location

  • 16km south-east of Delmas, Mpumalanga

Mining method

  • Opencast truck and shovel

Permitting

  • Mining Right expiring on 22 February 2030

Products produced

  • Thermal coal for Eskom
  • Metallurgical coal for domestic industrial consumers
  • Filter cake

Infrastructure

  • A 100tph 5 seam coal washing plant producing duff, peas and nuts for the domestic metallurgical industry
  • A 500tph coal washing plant producing domestic thermal coal for Eskom
  • A 60tph filter press plant
  • Well-maintained tarred and gravel access roads
  • Change houses, offices, workshops, laboratory and clinic
  • Pollution control facilities, twin-lined co-disposal facilities with related dirty water management systems
  • Bulk water and power reticulation, extensive road infrastructure, stockpile areas, weigh-bridge facilities and access roads

Property, plant and equipment value at 31 March 2016

  • R665 million (FY15: R707.5 million)

LTIFR to 31 March 2016

  • 0.14 (FY15: 0.10)

Employees

  • 17 permanent, 517 contractors, 16 interns/graduates (FY15: 15 permanent, 478 contractors, 20 interns/graduates)

Community involvement

  • Relocation of 19 families from Vanggatfontein Farm to newly built houses in Delmas. Title deeds to the new houses were handed over to the beneficiaries
  • Eight unemployed youths from Delmas joined the apprenticeship programme at Keaton Mining
  • Continued funding of 11 university students from the community through the Keaton Mining bursary scheme
  • Continued funding of 10 work experience learners and nine graduate interns for on-the-job training

Coal Reserve

44.4Mt (FY15: 49.2Mt)

Coal Resource

113.7Mt (FY15: 119.3Mt)

Life of mine

20 years

Washing capacity

600tph DMS

60tph filter press

Permitting

Mining Right

Contribution to group performance

  FY16   FY15   % change  
Production        
Sales (Mt)   2.4   2.5   (4) 
ROM (Mt)   3.6   3.7   (3) 
Waste (Mm3)   10.1   10.7   (6) 
Strip ratio achieved   2.8   2.9   (3) 
Safety        
LTIFR   0.14   0.10   40  
Fatality-free man hours   7 143 666   5 673 673   26  
People        
Number of employees (including contractors)   550   513   7  
Financial performance        
Revenue (Rm)   1 032.1   1 181.1   (13) 
Gross profit (%)   16   18   (11) 
EBITDA (Rm)   620.2   626.9   (1) 
Depreciation/amortisation (Rm)   (442.4)  (423) 
Operating profit (Rm)   177.9   203.8   (13) 
Capex (Rm)   400   431   (7) 


The Vanggatfontein operation comprises a contractor-operated opencast mine which delivers 5, 4 and 2 seam ROM coal to our two coal handling and processing plants – a 100tph 5 seam plant and a 500tph 2 and 4 seam plant. Both plants are owned by Keaton Mining but operated by a specialist contractor. The 2 and 4 seam products are trucked and/or railed to Eskom and the 5 seam products trucked to various domestic metallurgical customers.

Vanggatfontein reported a 0.14 LTIFR (FY15: 0.10). Zero harm remains a key focus for the group and safety is of paramount importance.

Vanggatfontein continued its excellent performance during the year while continuing to supply Eskom and 5 seam domestic metallurgical clients. The colliery delivered 2.2Mt washed 2 and 4 seam thermal coal to Eskom, a decrease of 2% on the previous year. Sales of 5 seam metallurgical coal was 0.1Mt in line with the geological model. Discard, slurry and B-grade sales were negligible. The filter press plant was commissioned in June 2015 and was completed on time and within budget. The filter press plant adds a revenue stream to the operation while both reducing our environmental footprint and dramatically improving water recovery from the tailings stream.

The current Vanggatfontein ROM Coal Reserve will sustain a 20-year life. Eskom’s demand is expected to continue increasing, positioning Vanggatfontein, as a primarily Eskom-focused producer, for continued growth.

Subsequent to year-end, the long-standing dispute with Megacube Mining Proprietary Limited relating to several breaches of the contract mining agreement at Vanggatfontein was resolved in Keaton Mining’s favour at arbitration.


Vaalkrantz Colliery*

Vaalkrantz Colliery

Vaalkrantz

Key facts

Ownership

  • Leeuw Mining and Exploration Proprietary Limited

Location

  • 20km east of Vryheid, KwaZulu-Natal

Mining method

  • Underground conventional bord and pillar

Permitting

  • Mining Right 211 expiring on 10 April 2018
  • Mining Right 225 expiring on 4 May 2024

Products produced

  • Anthracite for domestic and export metallurgical markets

Infrastructure

  • Two shaft complexes comprising four underground access portals
  • A 110tph two-stage anthracite washing plant producing duff, peas and nuts
  • Change houses, offices, workshops, laboratory and clinic
  • Extensive fleet of underground mining equipment, related power and water reticulation, extensive road infrastructure, stockpile areas and weigh-bridges
  • Railway siding

Property, plant and equipment value at 31 March 2016

  • R26.6 million (FY15: R52 million)

LTIFR to 31 March 2016

  • 0.06 (FY15: 0.22)

Employees at 31 March 2016

  • 52 permanent, 26 interns/learners/apprentices, 1 MQA fixed-term contract, 200 contractors (FY15: 52 permanent, 35 interns/learners/apprentices, 2 MQA fixed-term contracts, 794 contractors)

Community involvement

  • Completion and handover to beneficiaries of six houses in Mbilane
  • Continued funding of 18 community apprentices
  • Completion of the revamping and equipping of the crèche in Ezinyambe
  • Continued funding of 11 community university students through the LME bursary scheme
  • Continued funding of 10 graduate interns and nine work experience learners for on-the-job training exposure

Coal Reserve

No Coal Reserve declared (FY15: 2.0Mt)

Coal Resource

11.3Mt (FY15: 11.5Mt)

Life of mine

Estimated 4.5 years

Washing capacity

110tph two‑stage DMS

Permitting

Mining Right

Contribution to group performance

  FY16   FY15   % change  
Production        
Sales (Mt)   0.3   0.40   (25) 
ROM (Mt)   0.13   0.35   (63) 
Safety        
LTIFR   0.06   0.22   (73) 
Fatality-free man hours   1 433 947   286 893   >100  
People        
Number of employees (including contractors)   279   883   (71) 
Financial performance        
Revenue (Rm)   176.8   266.7   (34) 
Gross loss (%)   (18)  (3)  >100  
EBITDA (Rm)   (138.9)  (88.8)  56  
Depreciation/amortisation (Rm)   (4.0)  (18.3)  (78) 
Operating loss (Rm)   (142.9)  (107.1)  33  
Capex (Rm)   9.0   19.5   (54) 


Vaalkrantz comprises the Enyati and West adits which provide access to the high-quality Alfred and Gus seams of the Vryheid Coalfield. Generally, mining conditions in the KZN coalfields are among the most challenging in the South African coal industry. The seams are narrow and the intensity of dolerite dykes and sills, which are responsible for the creation of the anthracitic-quality coal seams, make underground planning and operation very complex. ROM production is trucked from the respective adits to the central double-stage DMS CHPP where sized products of various qualities are produced. All of our saleable coal is trucked from the plant to our boomlaer rail siding near Hlobane, from where products are either trucked or railed to both domestic and export customers.

Vaalkrantz Colliery reported a LTIFR of 0.06 (FY15: 0.22). The LME group incorporating Vaalkrantz Colliery was classified as “held-for-sale” during the year and a sale process was initiated. In February 2016, KEH concluded an agreement with BER to dispose of its wholly owned subsidiary LME thereby exiting the group’s exposure to anthracite operations and projects entirely. Post-year-end, Vaalkrantz Colliery was placed on care and maintenance notwithstanding continuous efforts by both LME and BER to minimise the losses exacerbated by the ongoing global decline in coal prices, force majeure declared on LME by its biggest customer and the unavailability of water due to the continued drought in the region. LME embarked on a section 189A process for the retrenchment of all employees during April 2016 which was finalised and became effective on 31 May 2016. Coal sales for the year were 45 556t domestic (FY15: 142 176t), 70 600t export (FY15: 138 300t) and 185 799t high ash (FY15: 114 974t).

* Vaalkrantz Colliery was sold as part of the sale of LME during FY16 and was placed on care and maintenance post year-end.