The Waterberg Coal Company (the Company) is the lead and managing partner in the Waterberg coal project joint venture (the Waterberg Coal Project) situated in the Limpopo province, South Africa. The Waterberg Coal Project consists of 8 coal tenements totalling 7,979 hectares and has identified SAMREC compliant coal mineral resources of 3.4 billion tonnes contained within the granted mining and prospecting rights.
Firestone Energy Limited (Firestone) and the Company, who is a significant shareholder in Firestone, each have holdings in the Waterberg Coal Project. Collectively they have a combined 70% holding in the Waterberg Coal Project; the remaining 30% is held by the BEE partner, Sekoko Resources Pty Ltd.
Extensive research into the state of the South African energy market has identified that the Waterberg Coal Project is the logical choice to use as a platform; not only to create a truly integrated energy solution, but also assist in solving the current South African energy crisis. The Waterberg Coal Project has extensive coal resources at a consistent quality and a reasonable cost. The Waterberg Coal Project is now an advanced project; which after 7 years of technical work and various studies (at an accumulated estimated cost of ZAR1 billion), has recently completed separate definitive feasibility studies to determine the economic and technical feasibility for:
- The Export Project: commencing a mine development project for the production of up to 4 million tonnes of high quality coal for a minimum of 30 years.
- The Eskom Project: phased supply of up to 10 million tonnes of high quality coal per annum for a period of 30 years to Eskom (the South African electricity provider) for the Majuba power station.
- The IPP Project: creation of a independent power producer platform to provide power generation pursuant to the South African Department of Energy’s IPP program. The Company also intends on supplying power directly to industry. Surplus or waste coal mined from the Export Project and Eskom Project will be used as a low cost fuel to the IPP Project.
The following should be noted about the Waterberg area:
- 50% of South Africa’s known coal reserves are contained within the Waterberg. The coal is high quality coal and suitable for both the South African domestic market and also the export market.
- Based on the confirmed Waterberg reserves, there is potential to support an additional 8 to 10 new power stations (similar in size to the Medupi Power Stations) in the area.
- Another power station is also planned for the Waterberg adjacent to the Waterberg Coal Project.
- Existing road, rail and other infrastructure required for project development is now in place.
- The existing Witbank coalfields, which have historically provided Eskom with their coal supply requirement, are now coming to an end.
- By 2041 up to 2.1 billion tonnes replacement coal will be required by Eskom for power stations.
- The Waterberg Coal Project is located immediately adjacent to Exxaro Grootegeluk mine which has been operating in excess of 25 years.
- The unique aspect of the Waterberg Coal Project is that the IPP generation plants will be situated alongside the coal resource and close to the electricity grid. Low cost material being fed into the IPP is the key to its long term viability and its financial success.
In summary, the current energy crisis in South Africa, and the demonstrable need for independent power generation capability together with the proposed development of South Africa’s largest undeveloped coal resource, the Waterberg Coal Project presents a unique opportunity and platform to create a substantial new independent integrated energy company.
The below image shows the location of the Waterberg Coal Project, its various properties and surrounding infrastructure.
Click to enlarge image