ResGen expects delay at Boikarabelo mine

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Resource Generations’ developments at its Boikarabelo coal mine have been delayed due to the liquidation of its earthworks contractor.

Resource Generation (ResGen), a new energy resource company, said that its Boikarabelo mine in South Africa’s Waterberg region, which accounts for 40 per cent of the country’s remaining coal resources and has probable reserves of around 744.8 million tonnes of coal, has been delayed by three to six months as the company’s main earthworks contractor, Protech Kuthele (PK), went into liquidation in early July 2014.  

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PK has since removed all its staff from the mine site and terminated all activities including those of its sub-contractors. Coal production is therefore estimated to begin in the first half of 2016.

(READ MORE: Protech files for business rescue)

“Recommencing earthworks for the rail link, roads and incomplete terraces require detailed surveys to establish bill of quantities for retendering,”said [DATA RSG:Resource Generation Limited], a company dually listed on the Australian and Johannesburg Stock Exchanges, in a statement.

Whilst Resource Generation does not expect any difficulty in appointing an alternative earthworks contractor for a similar cost, commercial prudence requires a diligent process to be undertaken.” 

However, significant progress has been made at the mine.

Stage one of the company’s mine development targets’ saleable coal production is at six million tonnes per annum.

The group’s construction camp at the mine has also been completed and can accommodate 1320 people. It has also developed permanent water supply and construction power infrastructure and has built 36.8 kilometres of roads and an office complex.

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A site inspection was also conducted by South Africa’s freight rail company, Transnet Freight Rail (TFR), as well as by the Department of Mineral Resources in Limpopo.

The group said that they will continue to work on several projects in the interim period such as completing its first three rail link bridges and the commencement of a 132 kilo volt-amps (KvA) main power facility.