Minergy Ltd. said it will record its first commercial sale at its Masama coal project soon. Following successful startup of mining operations, Minergy has exposed the first 340,000 metric tons (mt) of coal, which represents approximately three months of nameplate production. In doing so, the company has removed more than 2.5 cubic meters of overburden.

Minergy said it is completing the process to sign its first long-term contract, to deliver 120,000 mt per year (mtpy) of coal to one regional industrial customer, which represents approximately 10% of estimated annual saleable coal.

“Discussions are under way with a number of other interested regional industrial customers, many of whom have already tested samples of our coal over the past few months,” said Minergy CEO Morné du Plessis.

“We are extremely pleased with both the timing and the progress made at Masama coal project, we are transitioning from mine development into a mining operation at full production,” he said.

Currently Minergy is mining 110,000 mt per month, resulting in 70,000 to 80,000 mtpm of saleable coal. The saleable coal target is expected to increase to 100,000 mtpm in early 2020. “Our ramp up plan is on track, several opportunities to significantly increase production will be assessed going forward,” he said.

A coal resource of 386 million mt has been defined in terms of the preliminary workings for the Masama project and comprises open castable and underground mineable resources in the measured, indicated and inferred resource categories. Open castable coal reserves are currently in the process of being calculated and raw coal reserves are likely to range between 55 million and 65 million mt, with resultant saleable coal reserves likely in the range of 30 million to 40 million mt. The 386 million mt of total coal resource of Masama, approximately 82 million mt is considered open castable, giving a life of mine of 22 years. The remaining approximately 304 million mt is considered mineable by underground mining methods and could significantly extend the life of the mine.

Morné du Plessis said depending on the economics at the time, opportunities to significantly increase production include increased supply to industrial customers, export opportunities or power generation. “Increased production would require additional capex primarily to increase the capacity of washing plant and plant infrastructure, and completion of an additional box cut,” he said.