Creating opportunities for stakeholders

Reaching a higher tier in coal mining

All of us at Canyon Coal share a great sense of achievement about the Khanye Colliery team moving on site, because this great milestone helps transform our company from a junior coal miner to a mid-tier producer.

The Bronkhorstspruit-based colliery will produce 200 000 tonnes per month and has a long life of 17 years. The second milestone that catapulted us to the next tier in coal mining recently, is our acquisition of the Springfield Project in Vereeniging. This investment increases our reserve base by 300 million tonnes, to 700 million tonnes.

Canyon Coal is clearly continuing its strong growth. The current production of 320 000 tonnes per month from three operations will double output when both Khanye Colliery and ukuFisa mine are in full swing in 2018. We are also planning to bring the second phase of ukuFisa online in 2019, boosting coal production by another 400 000 tonnes per month and lifting Canyon Coal’s production to more than 10 million tonnes per year.

We have built a sustainable company employing a strategy of building a pipeline of projects with the right geologies. The company concentrates on exploring for coal, and has grown organically since our first exploration project, Hakhano Colliery, turned out to be a true gift.

Currently, Canyon Coal is continuing its drilling activities and planning to invest further in South Africa in the future. We believe it is a good environment in which to build a sustainable business. Moreover, we appreciate the fact that the government and the people of South Africa are so accommodating and that it is a free market with the rule of law and freedom of speech.

In future, we are in the market to consider acquiring more projects and operational rights. Should we find the right opportunity, we will grow both our reserve base and RBCT allocation, which is critical for our success. Of course, we are also interested in greenfields projects and prospecting rights, and look forward to supplying coal to Eskom when the utility is in the market.

Finally, once we reach critical mass, we will consider publicly listing the company. I believe this will present an opportunity for both the company and potential shareholders to benefit, since Canyon Coal has demonstrated that it has a unique way of doing business: we make decisions swiftly after conducting assessments, our mines and projects have the right geology, we have the right markets for our product, and best of all, our costs are competitive. Canyon Coal is fortunate to have passionate people, robust institutional memory and a solid database that captures the workings of the coal business.