March 29, 2012 / 4:08 PM / 5 years ago

Anglo to start New Largo mine construction next year

ZIBULO COLLIERY, South Africa (Reuters) - Anglo American will start constructing a coal mine at New Largo next year to supply a new power plant being built by South Africa’s state utility Eskom, the head of its coal division Norman Mbazima said on Thursday.

The mine, east of Johannesburg, is expected to produce between 14 and 15 million tonnes of coal for Eskom’s planned 4,800 MW Kusile power plant over the next 40-50 years.

“We are conducting the pre-feasibility and feasibility studies,” Mbazima told reporters after the launch of Anglo American’s 2.4 billion rand Zibulo Colliery in Mpumalanga.

The New Largo mine had been projected to cost $1.5 billion two years ago but that figure could be revised after the study, he said.

Mbazima said the newly launched Zibulo colliery is expected to attain full annual production capacity at eight million tonnes of coal by the end of the third quarter of this year,

Eskom is building two, large-scale coal-fired power plants, with the first, Medupi, expected to come on-stream next year. Kusile will open after that.

The national grid nearly collapsed in early 2008, forcing mines and smelters to shut for days and costing Africa’s biggest economy billions of dollars in lost output.

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