Keaton Energy had discovered enough resources to support a viable underground coal mine in Mpumalanga, although it had yet to continue with the drilling programme, the coal exploration and development company said yesterday. But once the drilling was completed, probably by July, Keaton would carry out a prefeasibility study to determine, among other things, the design and cost of the mine, said CEO Paul Miller.

He said the amount of min able resources at the Sterkfontein project was now double the amount originally discovered at the conclusion of the first phase of a drilling programme, which yielded up to 69-million tons of min able coal .

Coal to be produced from the mine would be suitable for export and to supply nearby Eskom power stations.

Further drilling would take pace and should be completed by July, after which Keaton would want a study carried out to “look at the actual mine design and the economics” of the project, Miller said.

“We were confident previously that there was sufficient coal to develop an underground mine with output suitable for both the export and domestic markets,” Miller said in a separate statement released to the JSE. “The substantially increased resource base allows us to consider the development of an underground mine with a significantly longer life.”

Keaton said in its regulatory filing that the project, about 143km southeast of Johannesburg, had been enlarged to cover a total of 7279,81ha after Keaton acquired, through subsidiary Labohlano Trading, another 3270ha of prospecting rights from Ibutho Mzinoni Coal. The acquisition included data from a 25-hole drill programme completed by the previous owners.

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