Coal of Africa inadvertently fallen into the gap between SA’s mining legislation & environmental laws

Thursday, 24 Feb 2011
By Charlotte Mathews

Case study: Vele coal mine

Coal of Africa, an Australia-listed coal mining company with a secondary listing on the JSE, has inadvertently fallen into the gap between SA’s mining legislation and environmental laws. It is proving to be a costly affair.

The company applied for a mining licence for its Vele coking coal mine in Limpopo two years ago, which it received last March after preparatory site work had already been done. Coking coal, used in making metals like steel and ferrochrome, is uncommon in SA and fetches premium prices.

However, the mine is in the vicinity of Mapungubwe, a site of considerable archaeological and cultural significance. It is also within the buffer area for the proposed Transfrontier Conservation Area, which plans to combine conservation properties within SA, Zimbabwe and Botswana. Though it is not actually within either of these declared areas, concerned groups fear that the visibility, effluents and logistics of an open-cast coal mine will severely affect the sensitive sites, and they have raised strong protests.


Work on the mine was suspended late last year, with R525m already spent, while Coal of Africa addressed concerns raised by Mpumalanga’s department of environmental affairs.

The Save Mapungubwe Coalition, which includes environmental, tourism and heritage groups, has applied for an interdict to stop work on the mine altogether.

Coal of Africa says it is committed to complying with current and any future legislation. By end-January it had submitted the necessary rectification papers under the National Environmental Management Act and had also hosted Unesco representatives and senior officials from the departments of mineral resources and environmental affairs .

Once it receives the go-ahead, it will take another three months to complete the mine.

First production of coking coal will follow shortly afterwards, it says.

Amid the controversy, Coal of Africa’s share price plunged from R17,60 on the JSE last April to a low of R7,69 in November. It has since recovered to around R10,50 — a level that will inhibit its ability to raise equity capital to develop other mines in SA.

Tags:steel mills, ferrochrome, raw material,Vele coking coal mine, Limpopo,open cast coal mine, strong protests, The Save Mapungubwe Coalition, interdict to stop work