Under the contract, Segdman will establish the process and engineering design parameters for the plant modification from the results of exploration infill drilling, coal quality testing and analysis performed during the past 12 months.
The modification and expansion of Vele Colliery beneficiation plant allows it to optimally produce three coal products including semi-soft coking coal, thermal coal and sized coal, simultaneously at processing capacity of 2.7 million tons of run-of-mine (ROM) per annum, Coal of Africa (CoAL) said.
The three-month scheduled FEED process will allow CoAL to arrive at a class one EPC estimate.
In September 2013, a sample of semi-soft coking coal was sent to ArcelorMittal South Africa in for metallurgical coal trials, which yielded positive results and the parties are negotiating an off-take agreement.
The scope of work also includes a stockpile management philosophy and associated design, a ROM handling, crushing and screening section, a de-stoning wash plant and a sized coal screening plant.
CoAL chief executive officer David Brown said the company continues to make significant progress in the implementation of five-point turnaround strategy.
"We are currently focused on finalizing off-take agreements and obtaining project finance for the plant modification, and are confident that this will be concluded within our committed time lines," Brown said.
The construction of the plant modification scheduled to be completed during the first half of 2015 followed by a production ramp-up phase.
