May 22, 2012 / 1:15 PM / 7 years ago

S.Africa's Sasol launches new $423 mln coal shaft

TRICHARDT, South Africa, May 22 (Reuters) - Petrochemicals group Sasol, the world’s top maker of motor fuel from coal, on Tuesday launched a new 3.5 billion rand ($423 million) shaft at its Twistdraai colliery in South Africa to extend the life of the mine beyond 2039.

The new shaft, Thubelisha, in South Africa’s eastern Mpumalanga province, will produce up to 10.6 million tonnes of coal per year when it reaches full production in 2018.

Sasol, South Africa’s third-largest coal producer, plans to invest a total of 14 billion rand over 8 years in new coal mines to replace older ones which are nearing the end of their life.

“The Thubelisha project is part of our mine replacement programme, which sees us replacing 60 percent of our operating capacity in Secunda over the next eight years,” Chief Executive David Constable said at the launch.

Up to 4 million tonnes of coal from the new shaft will be destined for exports, while some 3.8 million tonnes will be used to produce synthetic fuels and chemicals at the Secunda plant, with the remainder made up of discard coal.

Hermann Wenhold, managing director of Sasol’s mining unit, said the company plans to apply for a mining license in the northern Waterberg coal fields.

This is touted to become South Africa’s next key coal mining region as reserves in the Witbank area, where most mines currently are, near depletion.

“Our plan is to start with a relatively small mine,” he said, adding that the coal from that mine would be destined both for exports and domestic use.

The project will depend on the development of much needed infrastructure, which would link the coal fields with South Africa’s power stations and with export terminals at the coast.

Sasol currently produces more than 40 million tonnes of coal per year. ($1 = 8.2761 South African rand) (Reporting by Tebogo Mahlaela and Agnieszka Flak; Editing by Ed Stoddard)

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