Anglo American opens US$517 million coal mine

Formerly known as the Zondagsfontein project, Zibulo will supply both domestic and export quality coal. The construction of the mine which began in 2008, represents a total capital investment of R4.2 billion (US$517 million).

Speaking at the opening ceremony in Ogies, Minister of Mineral Resources, Susan Shabangu congratulated Anglo American Inyosi Coal (Pty) Ltd for the achievement. She said government was pleased to see empowerment deals that had significant participation by women and immediate communities that reside around mining areas. "I would like to congratulate both Anglo American and Inyosi for the successful commissioning of Zibulo Colliery. A fully operational mine signifies progress and growth of Anglo American Inyosi Coal," Minister Shabangu said. She said government recognises mining companies such as Anglo American as key partners in uplifting communities. "We are all aware of the inequalities that exist in our society today. Government alone cannot meet all these challenges that face our people today," Minister Shabangu said.

Norman Mbazima, Chief Executive of Anglo American's Thermal Coal business and chairman of Anglo American Inyosi Coal (Pty) Ltd Board said the partnership between Anglo American and Inyosi has delivered on its first project with excellent results. "Today marks an important milestone in the history of Anglo American Inyosi Coal. That we have been able to build and commission the first mine so soon after the company’s launch is testament to both parties' commitment," Mbazima said. He said the mine was built at the height of the global financial crisis which presented the company with a number of cost management challenges. "Despite this, we managed to have the first export coal from the Zibulo opencast section onto the train to the Richards Bay Coal Terminal on 30 October 2009," Mbazima concluded.

Chairperson of Inyosi, Yoli Balfour, said the opening of Zibulo Colliery marked an important step in the journey to empower historically disadvantaged South Africans (HDSAs) through wealth creation from the country’s mineral resources. "Today is an important day for empowerment in South Africa and in particular women and communities that reside in and around our operations," Balfour said. She said that the Inyosi consortium comprised 86% HDSAs and more than 50% women participants. Communities around Anglo American Inyosi Coal (Pty) Ltd operations will benefit from community projects funded separately by a trust. This means that communities also hold a stake in Anglo American Inyosi Coal (Pty) Ltd through the trust.

Anglo American Inyosi Coal (Pty) Ltd has two operational mines, Kriel and Zibulo and future projects including New Largo, Elders and Heidelberg will form part of this company. While Kriel was transferred as part of the deal in 2008, Zibulo was a greenfield project.

When it is fully commissioned, Zibulo will comprise:

• A multi-product operation delivering 8 million tons per annum (Mtpa) over a life of 20 years, with 7 Mtpa from its underground mine and the remaining 1 Mtpa from its opencast pit. Saleable production will be approximately 6 Mtpa, constituting both thermal export product and domestic product of 3 Mtpa each.
• Zibulo is also part of a 16 Mtpa run of mine joint venture washing plant, known as the Phola Coal Processing Plant, a 50:50 joint venture between Anglo American Inyosi Coal (Pty) Ltd and BHP Billiton Energy Coal South Africa Limited (BECSA). The plant (which is already operational) will be fed equally from Zibulo and BECSA’s Klipspruit Colliery.

Benefits to the local community

Apart from providing job opportunities to the local community in eMalahleni and in particular the nearby Phola township, the mine has already invested more than R50.5 million (to reach R60.5 million by end of 2012) in community projects. Phola township has benefitted from investments in bulk supply of services including the supply of clean water from the eMalahleni Water Reclamation Plant, sewer reticulation, environmental management and waste collection projects as well as a planned upgrade to the electrical supply infrastructure. The local community will also benefit from Anglo American’s Zimele initiative which will launch a small business hub in the area this year. Entrepreneurs will be able to apply for various financial support services from Zimele. The hub will also provide support to entrepreneurs with business plans, tender processes, access to infrastructural facilities like meeting areas, internet access, printing, photocopying etc.

Zimele is a highly successful initiative which has, since 2008 to December 2011, created and sustained over 19,575 jobs in 1,085 businesses throughout the country, with these businesses achieving a collective turnover of R2.3 billion. Zimele operates through five different funds, in which Anglo American has invested over R567 million.

© Anglo American South Africa / BulkInside