Springlake suffers roof collapse

The Springlake anthracite mine in Kwazulu-Natal, South Africa, has suffered a roof collapse in a portion of section 6, one of the underground working areas.

Toronto-based AfriOre (AFO-V) manages the mine. The company says there were no injuries and no lives were in danger at any point.

The area was examined by regulatory inspectors and independent specialists. They found that the design and operating standards of the mine comply with and exceed the industry design and safety standards that were established by the South African Chamber of Mines and accepted by the department of Minerals and Energy.

AfriOre’s specialists continue to investigate the incident and review the mine’s underground operating and mining standards.

The collapse trapped several pieces of underground mining equipment, some of which has been retrieved. Springlake’s insurers have made an initial interim payment of $1.83 million for the early replacement of lost equipment. The company is negotiating business interruption and additional equipment claims.

AfriOre says the incident may lower the fiscal year’s production by about 95,000 tonnes, or 13% of its original production estimate. Production has been accelerated in other underground sections, particularly at the mine’s open pit, to offset the shortfall. AfriOre expects that the net loss of sales tonnes produced will be less than 4% of that budgeted. The mine has enough stockpiled material to allow an uninterrupted long-term supply.

In 2000, South Africa’s Department of Minerals and Energy presented Springlake with an excellence award after the mine recorded its third successive year of accident-free operation.

During 2000, Springlake’s run-of-mine anthracite production increased to almost full capacity at 76,000 tonnes per month, up from 45,000 tonnes. The increase was thanks to the opening a third section underground and the addition of a contractor-managed open pit.

Cash costs at the mine were $14.20 per tonne. Capital expenditure was $730,000, including a prospecting program to delineate enough shallow coal reserves to support the new open pit at its current production rate for an estimated eight years.

Production from Springlake for the recent fiscal year includes 15 months of operations as AfriOre changed its fiscal year-end to February 28. During the 15-month period, Springlake produced 762,000 tonnes of run-of-mine coal and 490,000 tonnes of saleable coal. Sales totalled 556,000 tonnes.

AfriOre’s equal partner at Springlake is CIBC Capital Partners.

AfriOre plans to move its head office to Barbados.