(Alliance News) - MC Mining Ltd said on Wednesday it expects the construction of its new Makhado coal plant to start in the second half this year and indicated that this mine will be operated by a mining contractor.
The Western Australia-based coal miner said it had made "substantial progress" in bringing its Makhado hard coking coal project to production.
Makhado is estimated to produce an average 880,000 tonnes per annum of hard coking coal, while thermal coal production is expected to average 650,000 tonnes per year during the first five years of operation.
Shares in MC Mining rallied 15% to ZAR3.00 on Wednesday afternoon in Johannesburg. In London, the stock surged 16% to 12.73 pence.
First coal production is expected 18 months from commencement of construction of the handling and processing plant, which is expected to occur in the second half of this year, the coal producer said.
The group also said it expects to identify and appoint an outsourced coal handling and processing plant operating contractor and analytical laboratory operator early in the third quarter this year.
The owned of Uitkomst Colliery, an operating metallurgical and thermal coal mine, said it anticipates that the funding arrangements for the Makhado project will be concluded in early in the third quarter.
In a statement, the company said it had commenced an open tender process to select a mining contractor to operate the Makhado mine.
"Substantial progress has been made to convert the previous mining studies into an implementation plan for the first five years of mining operation that is sufficiently detailed for the project execution with attractive economics," MC Mining Chief Executive Godfrey Gomwe said.
MC Mining said Erudite (Pty) Ltd had completed the detailed designs for the mine infrastructure and coal handling and processing plant, and was in the process of obtaining detailed execution quotes for the construction of this plant.
"This process is expected to be finished in July 2023 and will also cater for the enlarged mining and processing footprint," it said.
By Artwell Dlamini, Alliance News reporter
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Mc Mining (MCM)