South Africa's State mining company – the African Exploration Mining & Finance Corporation – has built its first mine, a coal-mine in Mpumalanga province.

A company within the State-owned Central Energy Fund fold, the African Exploration Mining & Finance Corporation is also the operator of the Vlakfontein colliery, which is located about 100 km east of Johannesburg.

A media invitation said that President Jacob Zuma would officiate at the launch of the mine on Tuesday, but Mining Weekly Online was told soon after responding positively to the invitation, that the launch had been postponed and that a new date would be forthcoming.

Earlier this month, Mineral Resources Minister Susan Shabangu told Parliament that African Exploration Mining & Finance Corporation had been granted one mining right and 27 prospecting rights.

The source of the capital that the State mining company has used to build the mine, to procure equipment and to operate the mine is still unknown, as is the amount of capital involved and the funding model.

Also unknown is whether or not the company invited public tenders for the construction of the mine, for the equipment being used and for the services to the mine.

No reports have been forthcoming on exploration drilling results, bankable feasibiity studies or offtake agreements for the coal, which is presumed to be energy coal.

Traditionally, South Africa's coal mine business models have been based on selling low quality energy coal to State-owned power utility Eskom and exporting the higher quality coal.

Supply to Eskom alone has been seen not economically viable because of Eskom's reputation as not being prepared to pay high prices for the coal burnt in its power stations.

To export, companies must either have an export allocation at the Richards Bay Coal Terminal in Kwazulu-Natal or have an arrangement to sell to companies that do have an allocation. It can also be arranged for small quantities to be exported throught he port of Durban and Maputo.

South Africa's Chamber of Mines has asked that the State mining company be subject to the same legal strictures as private-sector mining companies.

Mining Weekly Online understands that the African Exploration Mining and Finance Corporation is also pursuing uranium opportunities, in addition to coal opportunities.

The State mining company is being developed at a time of strident parallel calls for the nationalisation of South Africa's mining industry and is seen as a response to political sentiment expressed at Polokwane, where Zuma was chosend to be South Africa's President.