Chairperson's View | Edition 006
Canyon Coal is very fortunate to have an extremely dedicated, dynamic young workforce that adapted quickly to changes in operating environments in the past few months.
Colleagues’ commitment to keep the wheels turning, while taking the necessary precautions to best deal with the realities of the COVID-19 pandemic in South Africa continues to be exceptional.
Canyon Coal is in full support of President Cyril Ramaphosa’s declaration of the state of national disaster and the regulations implemented to reduce infection rates and give our healthcare system time to prepare for the potential surge.
Even before the lockdown was declared in South Africa on 26 March 2020, Canyon Coal had put in place measures to mitigate the impacts of COVID-19. These included ordering masks and sanitisers for staff, improving hygiene awareness by emphasising the need to wash hands regularly and practicing social distancing, among others. You can read more about the measures that have been put in place in this edition of The Maroon Post.
Notwithstanding the measures we instituted, we didn’t lose our momentum. During the first 21 days we were able to seamlessly transition to using digital communication and collaboration platforms, to continue to communicate with colleagues without any major disruptions to our business. This is evidenced by the fact that Khanye Colliery achieved a new monthly production record by processing 204 480 tons of run of mine coal in June. Canyon Coal is committed to increasing safe production tonnages.
COVID-19 has however, delayed our schedule for the development of our new mining projects, as some of the government departments that need to grant approval for projects to progress, have been operating at limited capacity owing to lockdown restrictions.
Nonetheless, I am confident that we have everything under control and look forward to our next exciting project, which will be De Wittekrans. Around R1.6-billion will be invested in De Wittekrans, which will be an opencast and underground mine with an estimated life of mine of approximately 24 years based on a run-of-mine production of approximately 300 000 ton a month and create about 430 jobs. We will start development work on it as soon as possible.
The other project that we also aim to start developing this year is Palmietkuilen. It will cost around R1.5 billion to develop and create about 800 jobs. Palmietkuilen will be an opencast mine producing 600 000 tons of coal a month at steady state production with a life of mine of about 22 years.
We are very optimistic about the future of our business as we continue being a low-cost operator, taking care of our colleagues’ health and safety – which is our top priority. We are still pushing hard to achieve our target of producing 20 million tons of run of mine coal per annum, once we receive all pending required approvals.
Collectively we have had to tighten our belts and enact cost cutting measures, wherever possible, to ensure the long-term sustainability of the business. Nonetheless, I think we are heading in the right direction. Although our time tables have been delayed, they have been by no means derailed.
The coal price remains under pressure due to a variety of factors including international trade and political tensions. Further strain has been placed on the market due to global lockdowns, which have curtailed industrial business activity particularly in the Indian Peninsula, which is a major destination for South African export coal.
Locally, Eskom saw a decrease of around 7 000 MW of power generation, equating to about 20% of total demand. Our projects are being developed with the intent to provide Eskom with the right quality coal at a competitive price depending on its needs to support the revitalisation of South Africa’s economy.
However, as lockdown restrictions are eased globally, we foresee a steady recovery as countries will start rebuilding their economies and will require raw materials for energy and industrial purposes, such as steel production. This will present new opportunities for the company and the South African coal sector.
As you will read in this edition, we continue to support job creation, to create procurement opportunities for local communities, to undertake community development projects and business development initiatives, which form part of our social and labour plan (SLP) and local economic development (LED) requirements.
These are difficult times for our country and the world at large. However, by putting in proactive measures and adapting to the new realities, we are confident that we will emerge better and stronger.
Vuslat Bayoglu
Executive Chairperson
