Australian resource development group Resource Generation Limited which is developing the Boikarabelo coal project in South Africa’s Limpopo province, has seen the capital cost of this venture reduced by USD 120 million due to the availability of grid power. It has reduced the project’s estimated capital cost to USD 630 million.

South African power utility Eskom has committed to supply sufficient power for stage one of the mine’s operation as early as 2014 after the first generating unit at its new Medupi power station is in commercial operation. This will meet the company’s target of beginning coal production early in 2015. The cost of Boikarabelo’s planned 45 MW power station for which tenders have been received, has been removed from the capital expenditure estimate for stage one of Boikarabelo’s operations. A decision on whether to proceed with this will now not take place until 2013.

Mr Paul Jury MD of Resgen said that “This development provides a positive step in simplifying the funding and construction phases of stage one of the Boikarabelo mine. Importantly, subject to securing debt funding, the capital saving will reduce the amount of equity funds required.”

Source - ESI-Africa.com

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