Australian mining company Coal of Africa Limited (CoAL) has indicated that there is money to be made with reference to their Makhado project.

CoAL published the results of Makhado’s feasibility study last Wednesday (19th). According to the company, the mine will yield “robust economic returns” and, in turn, provide a platform to turn CoAL into a global coking and thermal-coal producer.

But could it be a case of CoAL's counting their chickens before they’ve hatched?

In the very same report, the mining company admits that they are still waiting for their mining right and water-use licence from the Department of Mineral Resources and Water Affairs respectively.

If CoAL had their way, the planned open-cast Makhado mine would produce 2.3 million metric tonnes of coking coal per year and 3.2 million tonnes of thermal coal, from the end of 2016. The possibility exists that the mine could later be expanded into an underground mine. CoAL has already started to look for the R4 billion that they will need to build Makhado, which is expected to have a 16-year life span. In anticipation of their mining operations, CoAL has also already designed a processing plant to handle all the coal that will be mined.

CoAL chairman David Brown expressed his delight with the outcome of the study. “This high-quality hard coking coal project will not only deliver robust economic returns but also contribute meaningfully to the economic development of the Limpopo Province in South Africa,” said Brown, adding that the “Makhado project represents the future of the company and is the first step in the development of a major 8 billion-tonne resource across our Soutpansberg coal field”.

Building around their vision, CoAL said that they intended to use borehole water for the construction phase of the mine. This phase will be supplemented by an additional 4.6 million litres of water per day from the Nzhelele Dam. This is, however, subject to their receiving their water-use licence.

CoAL had already, in December of last year, signed an agreement with a collection of farmers to buy the excess of their water-use rights that they have from the Nzhelele Dam.