An application has been filed for the transfer of the licence under Section 11 of the Minerals and petroleum Resources Development Act, at which point Acacia Coal Limited eill own 74% of the RAC project, with 26% held by a BEE consortium, African Onca Limited which will play an active role in the management of the company.
The management team of Coalvent is vastly experienced in African mining, and includes the founding management team of Riversdale Mining Limited, which was named after the RAC project which was its cornerstone asset.
The Riversdale Anthracite Colliery project (RAC) is a niche metallurgical anthracite project located in a mature anthracite coal field near Vryheid in KwaZulu-Natal in South Africa. The project meets all of RAC’s key project criteria and is significant as the last undeveloped low impurity anthracite project in South Africa.
South Africa has the world’s leading ferrochrome and ferromanganese industries, and a globally significant ilmenite smelting industry, all of which are low cost industry leaders in their field. The key customers are owned by Glencore, Rio Tinto, South 32, Samancor, and it is anticipated that the great majority of RAC’s product will be sold Freeon Truck to these customers, with some exports through a railway siding located 6 kilometres from the site proposed for the washing plant.
The RAC anthracite is marked by particularly low phosphorous content and low sulphur content which is essential to ferrochrome and ilmenite smelting. South Africa’s anthracite industry is mature, and mine closures due to reserve exhaustion in 2015-2016 have left a depleting supply of low impurity anthracite.
This has resulted in ferrochrome customers being willing to tolerate higher ash content (and thus better washing yields) provided that impurities are sufficiently low.
Barriers to entry in the form of port and logistics capacity and customer rejection of fines generated during multiple handling, support robust pricing and it is encouraging that domestic low impurity anthracite prices did not fall during the mineral cycle downturn early in this decade.