Coal of Africa Limited (CoAL) is halting mining activities at their Vele colliery, north of the Soutpansberg.

This is to enable CoAL to prepare for their pre-approved R220 million expansion project at the mine, the company announced on Tuesday. “A collaborative and inclusive engagement process with the contractor companies operating at the mine has been concluded, with 49 people retained,” it said in a statement.

Another 138 employees, said CoAL, had been redeployed to other operations owned by them, while 155 employees were retrenched.

CoAL had already announced the approval of the new budget during August. The Vele colliery, which is close to the Mapungubwe World Heritage Site, was severely affected by the January floods this year. The new credit will, however, enable Vele to produce a sufficient future cash flow to support the company's overheads.

“The approval follows the re-evaluation and confirmation of the quality of coal at Vele and the conclusion of a review of the current operations,” said CoAL.

“As part of that process and in order for the colliery to reduce the current cash losses incurred, the colliery will cease production during October 2013 in order to prepare for the construction phase of the announced expansion,” explained CoAL.

Fundraising for the planned expansion is expected to be completed by the end of March next year, which means that Vele would be fully operational again by the end of 2015.