RAL, mines working towards unlocking the ‘northern mineral belt’
The construction of the Boikarabelo coal mine in the Waterberg region is a massive economic undertaking.
LIMPOPO – It has probable reserves of 744 million tonnes, and will be one of the biggest coal mining operations in the country on completion. Exploration of these coal deposits forms part of the economic strategy contained in the National Infrastructure Plan to unlock the northern mineral belt with Waterberg as the catalyst.
An agreement was undertaken between the Roads Agency Limpopo (RAL) and Ledjadja Coal – the operating subsidiary responsible for Boikarabelo mine on behalf of owners Resource Generation (Resgen), to upgrade the road from the Lephalale commercial sector to Steenbokpan which includes all connecting roads to the mining site.In terms of the agreement, the mining company will contribute R71 million of the project cost of more than R200 million for upgrading the road from Steenbokpan to the mining areas, leaving RAL responsible for the remaining R129 million.
Detailed road designs have been completed and paid for by Ledjadja Coal. Speaking at the signing ceremony, RAL CEO, Maselaganye Matji, said public-private partnerships form part of the roads agency’s strategy of supporting businesses in the province and using new roads to stimulate economic growth.
“Most of our projects in these areas are structured in a way that we work with our partners because they cannot succeed without our support. Without access to the mining areas, your business cannot succeed,” he said.
RAL has so far managed to raise a total of R289 million since its entrance into public-private partnerships to finance the construction and rehabilitation of provincial roads that are considered key to economic stimulation. RAL has also partnered with Exxaro Coal Limited in the same Waterberg region for the design and construction of a road connecting GaSeleka villages to the Lephalale commercial centre.
The estimated project cost is R234 million, of which Exxaro Resources contributed R71,2 million, with RAL carrying the balance. The project is at the stage of appointing a contractor.
A three-way partnership has also been entered into with the North West province and cement maker PPC to upgrade the road from Dwaalboom to Northam and Koedoeskop. The total project value is R266 million, with a contribution of R67 million by PPC. The North West Provincial Government contributes R55 million and RAL makes up the difference. The contractor has been appointed and construction work is well underway.
In terms of its own calculations, RAL needs R150 billion to address the backlog, money that is not available through the fiscal. This is the reason the agency opted for public-private partnerships where it maintains control of the road infrastructure, but brings in private players who benefit from the roads to co-fund the asset. “The partnerships allow us to play with the resources we have. This is a good example of how the state can work with the private sector to contribute towards the economy of the country,” he said.
Not only do the new roads benefit the province and the companies involved, but they change the lives of community members in the area, making it easier for them to access nearby towns and other economic areas.
RAL is in negotiations with other private sector players in the Waterberg region, with the hope of concluding similar partnership agreements. “Our agreements are open-ended to accommodate new partners,” said Matji.
Ledjadja Coal CEO, Rob Lowe, said they expect full construction at the Boikarabelo mine by early 2017, to bring to life a project that has been seven years in the making. He said the mine will contribute R250 million a year to the local economy, provide part-time jobs to 3 000 people under construction and 685 full-time employees post construction. Transnet Freight Rail is also in the process of completing a rail link between the mine and Lephalale.
“We see ourselves as the key to unlocking the ‘northern mineral belt’. We couldn’t have done it without the support of the various stakeholders who joined forces with us to make this a national project,” he concluded.
