Firestone set to be 'new force in coal'

Firestone Energy Ltd says it is on track to commence small-scale mining in South Africa by the end of the year in a joint venture with local explorer Sekoko Coal Pty Ltd.

Perth-based Firestone said the partners aim to produce about 30,000 tonnes of thermal coal a month at the Waterberg project in the Limpopo province under the small-scale mining program.

It aims sell most of the bulk commodity, which is used in energy generation, to South Africa's state-owned electricity provider Eskom.

Firestone chief executive Garth Higgo said small-scale mining would provide the joint venture with "a starter pit for the large-scale mining operation we plan to commence in 2011".

"The company is also ... making good progress toward securing the $25 million necessary to fund the BFS (bankable feasibility study) to commence a large-scale mining operation," Firestone said on Friday.

"It is anticipated that funding arrangements will be finalised within two months."

The project's resource, in the indicated and inferred categories of Australia's mineral reporting code, has been increased by 12 per cent to 2.9 billion tonnes, which should yield 1.12 billion tonnes of saleable coal after washing.

Shares in Firestone fell 0.1 cents, or 2.7 per cent, to 3.6 cents.