“No illegal coal mining activities have taken place on the Tanga farm, just north of the Soutpansberg, as part of Coal of Africa Limited’s (CoAL) Makhado coking coal project.”

This was the response from CoAL’s CEO, John Wallington, following national media reports earlier this month that CoAL, an AIM-, ASX- and JSE-listed company, has started mining coal on the farm without a water licence or environmental authorisation. The reports also states that CoAL failed to inform local communities of their planned activities and that they negligently opened up a sensitive underground river feeding into the Nzhelele Dam during their mining activities.

Wallington said that the media reports misled the public into believing the mining entity was operating illegally. As announced on March 11 last year, CoAL received approval from the Department of Minerals and Resources (DMR) for the extraction of a bulk sample from Makhado, allowing the company to extract run-of-mine coal for testing. Furthermore, the Department of Water Affairs (DWAF) approved the general water use application, while the DMR approved CoAL’s environmental management plan, both with regard to the removal of the bulk sample. Wallington says that current mining activities on the site only relate to the removal of the bulk sample, which is in no way illegal as all necessary approvals have been received.

“Reports stating that CoAL has started mining are technically incorrect. To mine in South Africa, you need to have a new order mining right (NOMR). CoAL applied for an NOMR last Thursday and we expect it will take about a year for us to receive this license. CoAL has started to conduct extensive economic, social and environmental impact studies as part of the process to formulate a comprehensive environmental management programme,” Wallington said.

All required processes involved in the Mineral and Petroleum Resources Development Act (MPRDA), National Environmental Management Act (NEMA) and National Water Act will be run in parallel to ensure all relevant approvals are obtained. In line with the preparation for the application for the NOMR, CoAL has completed baseline social and environmental studies, conducted by a group of specialist independent consultants.

“The definitive feasibility study (DFS) for Makhado is currently going through a peer-review process that should be finalised in the first quarter of 2011. Following the approval of the NOMR and the completion of the DFS, the detailed design phase of the project will commence,” Wallington said.

The bulk sample comprises the removal of some 19 100 tons of coal, which will be washed and processed at the Tshikondeni mine, a process to be completed by mid-March this year. The sample will then be sent to ArcelorMittal’s steel manufacturing plant in Vanderbijlpark for testing as part of finalizing a proposed take-off agreement between CoAL and ArcelorMittal.

“The allegations that CoAL did not inform local communities of their activities, are not true,” Wallington said. “CoAL has facilitated the formation of a unified community engagement forum to represent communities affected by the Makhado project. This forum is a vehicle for communities to communicate issues of interest surrounding the project. Representation on the forum to date includes the communities of Fripp (Mudimeli), the Musekwa land claimants, Makushu, Mosholombi and Pfumembe. The Mphephu Traditional Authority has also provided support for the project. Consultation has commenced and is in progress with the Makhado Municipality and also the Soutpansberg Chamber of Commerce,” Wallington said.

With regard to CoAL negligently opening up a sensitive under ground river, Wallington said: “We categorically and unequivocally state that there is no river (or rivers) which have been drilled into.”