Johannesburg — A NEW coal partnership between global mining houses Anglo American and BHP-Billiton could lead to the development of SA's largest coal mine.

The two companies yesterday announced their intention to pool neighbouring resources in a new joint venture, which would create an important new opening for an empowerment player.

The venture is also designed to secure a long-term supply agreement with power parastatal Eskom.

The two companies have adjacent interests in what will be known as the Western Complex, near Ogies, 100km east of Johannesburg. The venture would incorporate the development of BHP Billiton's proposed $280m Klipspruit Project (see map).

The aim would be for the Western Complex to become a joint venture company, managed by Ingwe and Anglo Coal.

"Depending on all the resources, it might become the biggest coal mine in SA," said BHP Billiton vice-president Michael Campbell.

"The potential is quite big we could be looking at a mega mine into which all the assets could be folded."

He said that yesterday's announcement was also a way of "raising the flag" to empowerment companies. The joint venture would also look at export opportunities.

Campbell said that there were good precedents for co-operation between BHP-Billiton and Anglo American citing Samancor and Columbus Stainless Steel as two such examples.

"The investigation will include a review of the parties' coal assets in the Ogies area, in particular Ingwe's mines at Khutala and Klipspruit and the Weltevreden coal resources and Anglo Coal's coal resources at Zondagsfontein, Smaldeel and Beesting," the two parties said.

Investec analyst John Clemmow said that the announcement highlighted the trend towards cooperation, where there was mutual interest, between the large mining houses.

"We have seen this before with BHP Billiton and Anglo American, and elsewhere with Rio Tito as well," he said.

Another analysts said that the decision by the two large mining houses to boost their activities in the Ogies area might suggest that they believe Eskom could be planning to build a new power station there.

"At the very least it looks as if we are seeing the development of an important new mine," he said.

The two companies said the investigation, which is expected to take several months to complete, "will include a due diligence review of the parties' coal assets, followed by a feasibility study, with final approval for an expansion from both boards".

"Included in the feasibility process will be the introduction of suitable black economic empowerment partners," he said.