A leading South African thermal coal producer, the portfolio of Continental Coal Limited includes producing and advanced coal projects located in South Africa’s major coal fields.
With two currently operating mines, Vlakvarkfontein and Ferreira, producing 2Mtpa of thermal coal for the export and domestic markets, Continental’s aim for 2011 is to develop two more thermal coal mines. This leading coal producer is targeting a ROM production rate of 7Mtpa by the end of 2012.
The Company has concluded strategic off-take and funding agreements with EDF Trading for its export thermal coal production and recently signed a joint development agreement with KORES, Korea’s state mining and exploration company.
Teaming Up with EDF Trading
A leader in the international wholesale energy markets, EDF Trading is a wholly-owned subsidiary of EDF S.A. It boasts the ability to source, supply, transport, store, blend and convert physical commodities across the wholesale energy markets given the combination of its own portfolio of assets, combined with those of the EDF Group businesses.
Continental Coal has signed a Heads of Agreement with EDF Trading under which EDF Trading would acquire the Group’s production of export thermal coal from the Vlakvarkfontein, Vaalbank and Project X mines for a period of 20 years.
EDF Trading, under the terms of the Heads of Agreement also agreed to provide the Group with a US$20 million “coal loan” through an advance purchase of forecast thermal coal exports.
Future Developments, Prospects and Business Strategies
To further improve the group’s profit and maximise shareholders wealth, Continental Coal has planned the following developments for implementation in the near future:
- The Group will continue to expand its coal interests in South Africa. It has established its first operating coal mine, namely Vlakvarkfontein, and has at the date of this report entered into a binding heads of agreement to acquire 100% of the shares in unlisted South African mining and export coal producing group Mashala Resources; and
- The Group will develop these investments to production through its South African subsidiary Continental Coal Ltd.
These investment opportunities, together with the current strategy of continuous improvement and an adherence to quality control in existing markets, are expected to assist in the achievement of the group’s medium-term goal of investing in highly prospective coal resources in South Africa, with early cash flow to fund its ongoing financial requirements and minimum equity dilution.
Continental Coal, being a leader in the global coal industry, is committed to zero harm to people and the environment.
Believing Health, Safety, Environment and Community as being the company’s core corporate responsibilities, Continental Coal considers their employees, contractors, business partners, customers, suppliers, visitors and communities as being equal stakeholders in the operations.
The State and parastatal agencies also form part of Continental Coal’s stakeholder network.
The management system at Continental is dynamic and responsive and is consistent with industry best practice and legislation. The company is committed to documenting, implementing and maintaining its management systems to ensure clarity of purpose, and effective application of systems and procedures to enable it to:
- Identify, assess and manage risk;
- Adhere to applicable legislation and industry standards;
- Define HSEC objectives and targets and measure progress and compliance;
- Lead, develop and motivate staff to respect and adopt this commitment;
- Provide adequate resources to reach the HSEC goals;
- Support the fundamental rights of employees and communities to be safeguarded from unacceptable risk;
- Minimise the impact of the operations on the environment through pollution control, conservation and restoration of natural resources;
- Design and implement processes that result in timeous, cost effective and quality product delivery.
Continental Coal believes that the company will be successful when it meets its targets toward the goal of zero harm and when it is a valued member of the community in which it operates.
Continental Coal has a strong business plan in place to re-affirm its position as a leading coal producer in the region.
Being located in one of the world’s largest, most developed coal mining regions, Continental Coal boasts a high quality portfolio of advanced development/pre-production mines. The company is looking at furthering this portfolio by developing enhanced access to surface infrastructure including rail sidings, wash facilities, road, port, power and water.
With the goal of increasing production to over 10Mtpa of run of mine coal by end of 2015, Conventional Coal plans to commence thermal coal exports immediately and to further strengthen its financials with robust operating margins.