Major South African Coal Discovery Announced
Rio Tinto has further strengthened its presence in South Africa with the discovery of a open-pittable coal resource of more than 1 billion metric tons in the Limpopo Province. The coal is bituminous, and is suitable for generating electricity. The discovery at Chapudi came through Rio Tinto’s coal exploration program in the Limpopo (Soutpansberg) coal basin of South Africa. The exploration work has been conducted in conjunction with Rio Tinto’s BEE partner, Kwezi Mining. Exploration rights over the resource are held by two JV companies; Chapudi Coal PTY Ltd. (Rio Tinto 70%) and Kwezi Mining Exploration Pty Ltd. (Rio Tinto 49%). Rio Tinto and Kwezi are continuing with exploration activities for thermal and coking coal east of the Chapudi project.
"This is a significant find in an area that has previously been viewed as having little geological potential," said Chief Executive of Energy & Minerals, Preston Chiaro. "The project’s potential to produce thermal coal for electricity generation comes at a time when South Africa needs to rapidly increase its generating capacity. In addition, the basin offers the opportunity to produce a range of products, from thermal to hard coking coal for the export markets. We are currently planning the next phase of the project by beginning our pre-feasibility studies."
The newly discovered Chapudi Resource lies within the Limpopo coal basin, in the northern part of South Africa. The coal is hosted in sediments of the Karoo Group, similar to other coalfields in Southern Africa. The coal seams at Chapudi occur in mudstones that can be correlated to the Upper Ecca formations of the Main Karoo basin.
Rio Tinto and Kwezi Mining began exploring for coal in the area in 2003, when the first borehole was drilled on the farm Chapudi. This borehole intersected significant thicknesses of coal. Since then, the Rio Tinto-Kwezi JV has drilled about 90 boreholes in the project area, and conducted geophysical surveys to aid the geological interpretation. A total of 12,400 m have been drilled to date. The central part of the project now has sufficient drilling coverage to define a measured and indicated resource. The rest of the project area has been drilled to inferred resource status.
The coal has been demonstrated through test work to be suitable for combustion to generate electricity. Rio Tinto and Kwezi Mining are currently investigating the feasibility and economics of establishing a mining operation to feed coal into a power station. They are currently engaging with Eskom, and a number of Independent power providers to this effect.