TSX-V: CAF

FSE: 3CF

Southern Coal (Pty) Ltd.

Canaf, via its wholly owned South African subsidiary, Quantum Screening and Crushing (Pty) Ltd, (“Quantum”), owns 100% of Southern Coal (Pty) Ltd., (“Southern Coal”), a private South African company that focuses on anthracite beneficiation.

Southern Coal produces calcined anthracite, a product used primarily as a substitute to coke in the manufacturing process of steel and manganese. The company's two largest clients are world leaders in steel and ferromanganese production, namely ArcelorMittal and South32 respectively. Southern Coal has an operation near Newcastle, KwaZulu Natal, where its three kilns operate, de-volatising the raw material anthracite, known as calcining. The majority of Southern Coal's feedstock anthracite is supplied by local mines in KwaZulu Natal.

Calcining is a process whereby anthracite coal is heated to temperatures up to 1,100 degrees centigrade; the volatiles are burnt off and the effective carbon content increased. The final product, referred to as 'calcined anthracite' is used as a coke substitute. The calcined anthracite produced at Southern Coal is primarily used as a reductant in the manufacture of steel and manganese sinters within South Africa, as well as other sintering processes.

Location and Plant

Southern Coal’s operation is situated near Newcastle, KwaZulu Natal, South Africa.

Southern Coal runs three independent lines of production.  Two of which each consist of pre-heating stage feeding a main rotary kiln. The raw material, anthracite is feed into an electrically heated rotary pre-heater, which raises the temperature of the product to about 800 degrees C. The pre-heated (and red hot) anthracite is then fed into the main, refractory lined, rotary kiln. It is at this stage of the process that extra raw material is added to the main kiln. The temperature of the main kiln is then controlled to remain above 1,000 degrees centigrade so that calcination of the anthracite occurs and maximum amount of volatile matter is burnt off.

The final stage of the process involves the oxidization of any excess volatiles in the after-burners/oxidizers, before emission to the atmosphere.

In 2017 Southern Coal, commissioned a third line of production, which produces a similar quality of calcined anthracite, however the process is autogenous (self-sustaining), and thus significantly more efficient and cost effective, as well as being significantly more environmentally friendly.

Screening and Crushing Plants

Since the Company acquired Quantum and Southern Coal in 2007, significant investment has been made in crushing and screening equipment. Southern Coal now has the ability to offer existing and potential customers a range of size products, which subsequently opens up other markets.

Quantum own has 2 independent screening plants, which are capable to dry screen down to sizes as small as 6mm. 

Profitability, Performance and Expansion Program

Southern Coal has been operating profitably since the Corporation acquired it in 2007.

Southern Coal has built up a fine reputation for product quality and reliability of supply, which has earned the respect and preference from two of the major steel and manganese producers in the world. Canaf believes that as long as Southern Coal maintains its focus on its core values, coupled with the consistent demand of calcined anthracite as a replacement to coke in the reductant market, that the business will continue to expand and provide cash flow to Quantum and the Corporation to grow and diversify.

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