26 Oct 2010 12:00
26 October 2010
Strategic Natural Resources PLC
("Strategic Natural Resources" or the "Company")
SNR Progresses Export Strategy
Further to the announcement, released on the 22nd October 2010, that the Company has received the final Washability and Market Application Study in relation to the Elitheni mine (the "Study") the board of Strategic Natural Resources have completed their review of the Study and are pleased to announce their preliminary findings.
The report shows that there is variability in the type of coal across the extent of the coalfield. However, Professor Rosemary Falcon, well known for her assessment of South African Coal, has confirmed the suitability of the Elitheni coal for various major markets, both in South Africa and abroad. This is subject to: good mine planning; proper beneficiation of the mined coal, to reduce the ash content and to achieve the correct sizing; and the related economic feasibility of this extraction and beneficiation. Based on results of the collective feasibility studies undertaken to date, including updated mine planning and cost assessment, the Company is confident this is achievable.
The suitable markets for the Elitheni coal have been identified as follows:
1. the PCI (Pulversised Combustion Injection) market, where coal is used in blast furnaces as a pre-reductant in the preparation of iron and steel;
2. export or local use for high value products in the metallurgical industries. The washed finer material from Elitheni can be used as a possible replacement for coke, char and petcoke;
3. export to countries such as Turkey, where coal is used in the domestic heating market;
4. export to countries such as India where coal is often used for power generation or blended with other coals other than coke; and
5. local use for power and/or heat generation.
The Study shows that the Elitheni coal is precluded from coke blending and would not be suitable for existing Eskom boilers. However it would be suitable for fluidised bed boilers.
The Company is in discussion with several international traders, power developers and coal brokering companies and will be looking to secure future commitments in the form of coal offtake agreements, investment at the Elitheni mine and investment in the Port of East London. The Board hope to be able to commence exports of Elitheni coal in 2012.
The full text of the conclusions of the Study and key aspects in terms of utilisation, will be posted on the Company's web site shortly (www.snrplc.co.uk)
Strategic Natural Resources, Chief Executive Officer, David Nel, today commented: "With the rising coal price we are delighted to receive positive confirmation from an independent third party that coal from the Elitheni mine has so many applications and can be effectively washed to supply not only the thermal market but also high value markets such as the metallurgical and Pulversised Combustion Injection markets too. We will be working hard to deliver to our shareholders the right offtake agreements with partners on a long term basis to enable our strategy to succeed."
For Further Information, please contact:
Strategic Natural Resources plc
David Nel, Chief Executive Officer
+27 (0) 41 374 0842
Jeremy Metcalfe, Communications Director
+44 (0)7785 346 718
Nominated Adviser; Allenby Capital Limited
Nick Naylor / James Reeve
+44 (0) 20 3328 5661
Broker; SP Angel Corporate Finance Limited
Emin Eyi / Tercel Moore
+44 (0) 207 647 9646
Financial PR/IR; Blythe Weigh Communications
+44 (0) 207 138 3204
Ana Ribeiro / Tim Blythe
For further information about Strategic Natural Resources please visit
www.snrplc.co.uk