| Thu 4 Nov 2010, 11:55 | | CZA - Coal of Africa Limited - Response to media article regarding Mooiplaats |
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CZA
CZA
CZA - Coal of Africa Limited - Response to media article regarding Mooiplaats
Coal of Africa Limited
(previously, "GVM Metals Limited")
(Incorporated and registered in Australia)
(Registration number ABN 008 905 388)
JSE Share code: CZA
ASX Share code: CZA
ISIN AU000000CZA6
(`CoAL` or `the Company`)
RESPONSE TO MEDIA ARTICLE REGARDING MOOIPLAATS
Coal of Africa Limited ("CoAL" or "the Company"), the coal mining and
development company operating in South Africa (ticker: CZA) and listed on the
AIM, ASX and JSE, notes recent press articles published by media in South Africa
on 3 November 2010 regarding the Company`s activities at the Mooiplaats Colliery
in Mpumalanga, together with the Company`s recent announcement of 3 November
2010.
Coal would like to emphasise the following:
1.Mooiplaats has complied fully with all the DMR requirements
2.The Pre-compliance Notice is based on the Department of Environmental Affairs`
NEMA requirements. If the principles of applying this ruling are consistently
applied across the mining industry nearly every mine in this country would be
forced to close.
3.Mooiplaats, in good faith, is in the process of complying with NEMA and a
Compliance Notice is therefore unnecessary
4.Lack of clarity and consistency in the application of regulatory compliance
negatively impacts on investment in SA and can cause significant job losses.
5.Mooiplaats will comply fully with the Pre-compliance notice.
The Colliery Environmental Management Plan (EMP) was approved on 25 September
2007 by the Department of Mineral Resources (DMR). Development of the mining
area commenced in August 2008 and the financial liability provision and
assessment plan was submitted for 2009 and updated in 2010.
Application was not initially made in terms of NEMA for authorization as these
activities were authorized by the EMP and the general understanding within the
mining industry is that as this involves a full EIA process and the
environmental authorities are involved in that process no separate EIA is
required for activities directly related to mining.
The Company acknowledges that it has received a pre-compliance notice (Notice)
from the Mpumalanga Department of Economic Development, Environment and Tourism
("MDEDET") noting its intention to issue a Compliance Notice in terms of section
31L of the National Environmental Management Act in relation to activities
undertaken by the Company on portions 1 and 9 Farm Mooiplaats 219 IT in Ermelo
("Compliance Notice"). However CoAL would like to take this opportunity to state
that, contrary to the media reports, it has not been instructed nor is required
by law to stop activities at the mine and only in the event that a Compliance
Notice is received, will mining activities need to cease.
Pursuant to the terms of the Notice, CoAL may make an application for
rectification within 10 days of receipt of (11 November 2010), following which
the Department has stated that it may decide not to issue the Company with a
Compliance Notice.
The activities referred to in the Notice include the construction of facilities
or infrastructure, including associated structures or infrastructures:
- for the storage of more than 250 tonnes but less than 100,000 tonnes of coal;
- in the one in ten year flood line of a river or stream or within 32 metres
from the bank of a river or a stream where the floodline is unknown;
- for any process or activity which requires a permit or licence in terms of
legislation governing the generation or release of emissions, pollution,
effluent or waste and which is not identified in Government Notice No. R386 of
2006; and
- for the manufacturing or storage or testing of explosives, including
ammunition, but excluding licensed retail outlets and the legal end use of such
explosives.
Other interactions with the environmental authorities include;
- 25 March 2009; meeting with Mpumalanga Department of Agriculture & Land
Affairs was held to finalise approvals required for the construction phase to
start;
- 27 March 2009; meeting was held with the Department of Water Affairs ("DWA")
to discuss the Integrated Water Use License Application ("IWULA"). The DWA
recommended that the colliery submit an IWULA for both Mooiplaats North and
South as a single entity. Mooiplaats South is scheduled to commence production
in 2012; and
- 10 June 2009 the Colliery management had a site meeting with MDEDET and the
following activities were listed as requiring a Section 24 G application;
- The construction of the road and the stream crossing;
- Diesel storage tanks;
- Sewage Treatment Plant; and
- The excavation and in-filling of soil in a river/stream
The S24G applications were submitted on 15 June 2010 for all activities
identified. The acknowledgement of the S24G applications was received from
MDEDET on 23 June 2010. On 10 June 2009 the Processing Plant, coal stockpiles
and explosives store were not identified by the MDEDET officers as activities
that needed rectification.
Regional Interactions
Mooiplaats Colliery actively participates in the Grootdraai Dam Catchment Forum
where regular feedback is given on activities and water qualities at Mooiplaats
Colliery in the presence of DWA and MDEDET officials. Regular testing at two DWA
sampling points revealed that the Colliery is within acceptable levels at the
downstream sampling point situated at the Vaal River the suphate concentration
is below 200mg/l. Therefore the recent allegation that the Colliery is polluting
the Witpuntspruit which feeds into the Vaal River is incorrect.
When mine management at the Colliery enquired from the relevant officials the
motivation for the Notice in view of the on-going interactions and rectification
processes already being implemented, the responses were that of surprise and
uncertainty from the officials actually dealing with these matters.
The delivery of a Pre-compliance notice with threats of closure for activities
that commenced in 2008 is inconsistent with all prior Departmental interactions
and, in the Company`s view, totally unjustified. If the principles of applying
this ruling are consistently applied across the mining industry, the Company is
of the opinion that the majority of mines in this country would be forced to
close. Mining related activities are specifically approved under the MPRDA at
the time the Company executes a NOMR with the simultaneous approval of the EMP.
Since my appointment to Coal of Africa in July 2010, we have acknowledged the
shortfalls that have manifested during the rapid growth of the Company over the
past 2 years. I have also repeatedly emphasized that CoAL is moving into a new
era as a mining production company with a commitment made to comply fully with
all legislation. This position is supported by its ambition to graduate to the
Main Stock Exchange in London which expects corporate governance of the highest
level.
The Company has to date, in a short space of time, attracted well in excess of
R2billion of direct foreign investment into South Africa and already employs
over 1000 people. There is support from our major shareholders to increase this
substantially when required to develop the economically transformative projects
near Makhado.
The Company is now left with no choice but to explore all legal and
constitutional options to ensure that the rights of the Company, its employees
and shareholders are protected as much as possible.
The Company`s intention in relation to the pre-compliance notice is to seek
rectification as specified for the activities commenced, but it does not believe
this is a circumstance in which closure, pending consideration of the
application, is warranted and will pursue all its available options in this
regard.
JOHN WALLINGTON
Chief Executive Officer
For more information contact:
John Wallington / Blair Sergeant
CoAL +27 (0) 11 575 4363
Simon Edwards / Chris Sim
Evolution Securities +44 (0) 20 7071 4300
Jos Simson / Leesa Peters
Conduit PR +44 (0) 20 7429 6603
Melanie de Nysschen/Annerie Britz/
Yvette Labuschangne
Macquarie First South Advisers +27 (0) 11 583 2000
www.coalofafrica.com
About CoAL
CoAL is an AIM/ASX/JSE listed coal mining and development company operating in
South Africa. CoAL`s key projects include the Woestalleen Colliery, the
Mooiplaats thermal coal mine, the Vele coking coal project and the Makhado
coking coal project.
The Mooiplaats coal mine commenced production in 2008 and is currently ramping
up to produce 2 million tonnes per annum ("Mtpa"). CoAL`s Makhado coking coal
project is expected to start production in 2012 and timing for Vele to reach
production is expected tp commence Q1 2011. These operations are targeted to
collectively produce an initial 2 Mtpa ramping up to a combined annual output of
10 Mtpa of coking coal.
In 2010, CoAL completed the ZAR467m acquisition of NuCoal Mining (Pty) Limited
("NuCoal"), a thermal coal producer with assets in South Africa in close
proximity to CoAL`s Mooiplaats mine. NuCoal owns the Woestalleen Colliery, which
has a number of off-take contracts in place and processes approximately 2.5Mtpa
of saleable coal for domestic and export markets. NuCoal also owns two
beneficiation plants, one fully operational mine producing approximately 300kt
per month of ROM coal and has recently commenced production at a second mine.
CoAL currently has 1 Mtpa export capacity at the Matola Terminal in Maputo,
Mozambique, increasing to 3 Mtpa on completion of the next phase of expansion at
the terminal. CoAL also has the option to participate in further expansion at
the Matola Terminal, which is expected to increase the capacity at the terminal
by an additional 10 Mtpa.
Date: 04/11/2010 11:55:01 Produced by the JSE SENS Department.
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