The construction phase of the new Gugulethu Colliery is in full swing.

“We’ve started working on the box cut with the anticipation that first coal will be extracted sometime around July/August this year,” Menar MD Vuslat Bayoglu tells Mining Weekly. (Also watch attached Creamer Media video.)

The R600-million capital being expended on the Gugulethu project in Mpumalanga makes up more than half of the R1.04-billion worth of investment in South Africa pledged by Menar at President Cyril Ramaphosa’s South Africa Investment Conference.

Menar pledged an overall R1.04-billion at the fifth SA Investment Conference to fund two mining ventures that fall under its subsidiary, Canyon Coal. A further R440-million will go towards developing the Thuso project, also in Mpumalanga.

The fully licensed Gugulethu Colliery, southeast of Hendrina, is projected to create 400 jobs.

Developments have progressed well, despite delays in the construction of the road at the beginning due to heavy rains.

Two teams working on the box cut are removing the topsoil and stockpiling it separately.

The refurbished processing plant infrastructure is scheduled to be operational by September.

The first phase of opencast operation is expected to produce 200 000 t of run-of-mine coal a month. The second phase, which consists of underground mining, should resume in seven years.

Thuso, in Bethal, is also fully licensed and work on its infrastructure plan is being finalised.

“If the coal prices stabilise, we should be able to start developing Thuso by the fourth quarter of this year. Both these mines will supply the export market because the local market is currently not viable due to Eskom not burning enough coal,” Bayoglu points out.

Mining Weekly: The last time we spoke, you expressed confidence that South Africa’s coal export logistics problems would be sorted out. Are you still of that view?

Bayoglu: I think we will have the most competitive tariffs in the world, should the situation at Transnet stabilise. But the challenge is that the unavailability of locomotives is yet to be resolved, resulting in Transnet’s continued underperformance. We know that Public Enterprises Minister Pravin Gordhan recently visited China to fix the situation but there is no feedback on whether the diplomatic intervention was a success or not. Transnet might also have other challenges on top of the unavailability of locomotives. I am sure that Transnet CEO Portia Derby has assessed the situation and she will take the necessary steps to steer the organisation in the right direction. A few years ago, they offered severance packages, which led to the organisation losing a lot of experienced people. Perhaps Transnet should consider roping those professionals back in because they were effective in handling things like maintenance and running the lines efficiently. The Transnet and Freight Rail CEOs are open in their communication but the challenge is that they are not making critical decisions on time which creates a lot of frustration in the industry. I am very hopeful that the problem will be fixed. Complaining is not going to help us. We must engage in constructive discussions and try to come up with solutions because there is only one Transnet and to build another one could take us another 40 or 50 years.

Another challenge is that there seems to be some reluctance toward private sector involvement when it comes to rail. I do not think they should be afraid, because the private sector has the potential to add value by coming up with new ideas and less bureaucratic procurement processes. Transnet can still be in control through regulating the industry and owning the infrastructure. Mining industry companies that move various bulk commodities through the ports like chrome, manganese and coal are prepared to work with Transnet. This is not to say that the private sector wants to tell Transnet how to run its affairs, but rather to work with the rail operator under its guidance.

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