Universal Coal Plc began open-pit mining at its New Clydesdale operation in South Africa after securing a five-year, 650,000-tonne-per-annum export contract.

The ASX-listed miner on Jan. 30 said the export contract with an undisclosed global commodities trader provides additional security for the New Clydesdale colliery debt facility and has enabled the start of open-pit operations.

The open-pit operation marks the second phase of the planned 3.3 million-tonne-per-annum run-of-mine development.

The underground mine began in September 2016 and is set to reach annual nameplate capacity of 900,000 tonnes per annum of primarily 6,000 Kcal thermal coal by the end of the first quarter.

The open-pit mine will deliver a further 2.4 Mtpa of domestic thermal and low phosphorus metallurgical coal from the adjacent Roodekop pit once steady state is achieved in mid-2017.

Universal Coal secured a seven-year sales agreement with South African electricity utility Eskom in November 2016. First coal is expected to be delivered to Eskom at the end of the first quarter.

The company is now finalizing the A$22 million debt financing facility to fund the remainder of the development activities at the New Clydesdale colliery.