In 2008 the Molteno Coal Field was re-opened for commercial production with a small scale open cast mine at Indwe, Eastern Cape. This mine is situated on 5 hectares of land within a headwater catchment of the White Kei River, a tributary of the Great Kei River. The Molteno coal seam was one of the first to be exploited in South Africa, where mining commenced in 1877, rising to an average peak production of 176 000 tonnes per annum by 1904. Production gradually fell when higher grades of coal were discovered in Gauteng and KwaZulu-Natal, and the mines were abandoned, unrehabilitated, by 1948. The abandoned workings have continued to be mined by informal coal miners for over 100 years. The historic effects of the unrehabilitated works and the ongoing informal mining on the water quality of receiving water resources have been found to be relatively minor, with evidence of high alkalinity in downstream rivers and dams (pH median > 8). With the development of high efficiency circulating fluidized-bed (CFB) technology, the low grade Molteno coal seam has become commercially attractive for a range of industrial and power generation applications. Production of up to 100 000 – 240 000 tonnes per annum of the estimated 100 million tonnes of measured coal is now planned for the first phase of the project. The potential for acid mine drainage due to the scheduled increase in production has been addressed through a combination of environmentally sustainable practices on site including the ongoing rehabilitation of pits prior to blasting of new areas, minimization of on-site stockpiling, and the establishment of settling ponds for stormwater runoff interception. In addition the geochemistry of the coal seam and buffering capacity of the soils and receiving water resources is the subject of a further research initiative.