Here in the Soutpansberg, water has been a sensitive issue for a number of years. Mention water and mining companies in the same sentence, and a severe lashing out is guaranteed - depending on which circles you might find yourself in.

The recent announcement by mining company Coal of Africa Limited (CoAL) that they have received their integrated water-use license (IWUL) from the Department of Water Affairs for their Makhado mine was not welcome news for everyone.

CoAL, on the other hand, was over the moon with the granting of the IWUL. “The award of the IWUL for Makhado further signifies the government’s commitment to the flagship project, and its potential for social-economic transformation,” said CoAL in a press release.

The Makhado mine will be situated approximately 65km southwest of Musina and, if it becomes a reality, it will surround the indigenous Mudimele community.

Construction is set to commence in the second quarter of this financial year and expected to last 26 months, with a further four-month ramp-up phase. The final production capacity of the mine will be 5.5 million tons of saleable coal per year.

Together with this announcement, CoAL said that the finances would be managed through the memorandum of agreement that they signed with the Qingdaao Hengshun Zhongsheng Group (Hengshun) regarding a proposed equity investment in Baobab Mining and Exploration, a CoAL subsidiary that owns the mining rights for the Makhado project.

Hengshun has already begun due diligence on the Makhado project and has expressed an interest in acquiring an interest in the project and in providing facilitated debt. “The understanding with Hengshun is an important milestone in the identification of a strategic investor for the development of the company’s flagship Makhado project,” said David Brown, CoAL’s CEO. “In addition, the potential acquisition of Universal will transform the company into a mid-tier producer,” he added.

During November of last year, CoAL agreed to acquire Universal Coal, another Australian listed company. Universal currently produces about 2.4 million tons of coal per year from its other South African assets.

Universal is currently busy with an application to the relevant departments for a mining-right licence. The affected properties will include the farms Bernice 548MS, Celine 547 MS, Portion 1 Doorvaardt 355MS, remainder Doorvaardt 355MS, Matsuri 358MS, Longford 354MS and Gezelschap 395MS, all located north of the Soutpansberg.

A public meeting will be held for interested and affected parties at 11:00 on 20 February at the Tshirolwe Community Hall (Musanda) in the Nzhelele district and a second meeting at 11:00 on 5 March at the Farmers Association Hall in Waterpoort.

Residents who needs more information or want to register for the meeting are invited to contact Jomela Consulting (Pty) Ltd at Tel 012 772 2350 or 082 970 1513.