Universal Coal Plc (ASX:UNV) is set to significantly increase overall sales of thermal coal after commencing production at its second coal mine, the New Clydesdale Colliery (NCC) in South Africa.
The first production of run-of-mine (ROM) coal occurred on 8 September 2016 from the Diepspruit underground area at NCC, with the first continuous miner section coming on stream.
The anticipated production from the NCC phase 1 underground operation is 900,000 tonnes per annum ROM of export quality thermal coal destined for export markets.
NCC, located in South Africa's premier coal region in the Witbank basin, hosts a JORC 2012 mineral resource of 130.4 million tonnes thermal coal, sufficient for over twenty years of operation.
Universal’s first project, Kangala Mine in South Africa, achieved record ROM production of 3.2 million tonnes in FY2016.
The record sales of 2.04 million tonnes helped the company generate unaudited group EBITDA of $17 million in FY2016, up 16% from FY2015.
Universal is finalising agreements with potential offtake partners for the NCC phase 1 product, with the first coal sales anticipated this month.
The phase 2 development at NCC continues to advance in line with long-term offtake discussions.
The second phase will be an open pit development at the adjacent Roodekop project, delivering up to a further 2 million tonnes per annum ROM of thermal coal.
Australian thermal coal prices from the port of Newcastle have jumped around 35% from mid-June to around US$70 a metric ton now.
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