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Universal Coal granted mining right for Eloff coal project in South Africa

Universal Coal PLC's 49%-owned Eloff Mining Co. Pty. Ltd. received the mining right and environmental approval for the Eloff coal project in South Africa.

The company said Dec. 17 that it will start development work after receiving the integrated water-use license and the waste license.

The Eloff mining right covers 8,168 hectares, in addition to surface rights over 6,146.7 hectares of the project area, and hosts a coal resource of 424 million tonnes.

Universal can choose to consolidate the eastern portion of the Eloff project with its existing Kangala colliery, extending the latter's mine life.

"The eastern portion of the Eloff project is a direct extension of Kangala's current pit and will require limited future development capital resulting in significant cost saving in monetizing Eloff," the company said.

The western portion of the Eloff portion could be developed into Universal's fifth stand-alone mine.

Universal recently reported a 98.4% increase in the JORC-compliant mineral ore reserve at its 49%-owned North Block Complex coal operation in South Africa. The project now hosts reserves of 55.5 million tonnes, including 49 Mt in the proved category and 6.5 Mt in the probable category.