Name and Location
Boikarabelo coal project, Limpopo, South Africa.

Client
Resource Generation (Resgen).

Project Description
Boikarabelo has probable reserves of 744.8-million tonnes, a measured resource of 1.1-billion tonnes, an indicated resource of 551.7-million tonnes and an inferred resource of 1.5-billion tonnes.

The Boikarabelo coal seam is between 20 m and 30 m below surface, enabling low-cost, opencut mining. The seam is between 120 m and 130 m thick, with zones of varying-quality thermal and soft coking coal.

The mine will be developed using a two-phased approach to limit upfront capital expenditure. The first phase will deliver about 14-million tonnes of run-of-mine coal a year, which will equate to about six-million tonnes of product coal. Of this, three-million tonnes will be exported and three-million tonnes will be used domestically.

Phase 2, planned for 2022, will involve ramping up production to 20-million tonnes of product thermal coal.

The project includes a 40 km rail link to the existing rail network.

Boikarabelo hosts a life-of-mine of up to 100 years.

Net Present Value/Internal Rate of Return
Not stated.

Value
The estimated capital cost for the project is $480-million.

Duration
Resgen black economic-empowerment subsidiary Ledjadja Coal received the Boikarabelo mining rights from the Department of Mineral Resources in April 2011.

Initial construction of the mine started in the first quarter of 2013 and is scheduled for completion in the second half of 2017.

The mine is expected to begin production in late 2017.

Latest Developments
Resgen has approached the Australian government’s Takeovers Panel for orders to prevent its three largest shareholders – Altius Investments Holdings, Noble Group and the Public Investment Corporation (PIC) – from voting at a shareholder meeting requisitioned by Altius.

This comes as Altius, parent company of Resgen shareholder Shinto Torii, last week refused to withdraw its 249D request for a shareholder meeting to consider the removal of current directors and the appointment of new directors.

Altius had argued that the current directors had failed to obtain the required funding to progress the Boikarabelo mine development, in Limpopo.

Resgen had, however, announced soon after that it had signed a memorandum of agreement with Swiss private company HAB & JBR Privée for a $480-million financing package.

It called on Altius to withdraw its 249D request, says the removal of the current directors could jeopardise the funding deal with HAB & JBR Privée.

No reasons were provided for Altius’s decision not to withdraw its request for a shareholder meeting.

Meanwhile, Resgen had, on October 1, claimed that Altius, Shinto Torii, Noble and the PIC had used illegal collective action to try to replace Resgen’s directors with its own nominees, after the coal miner had dismissed Noble’s request on September 18 that additional directors be appointed to Resgen’s board and to the board of Resgen’s black economic-empowerment subsidiary Ledjadja Coal.

Resgen, has written to the Australian Securities and Investments Commission regarding the matter. The company has said it has disclosed confidential material information to Altius, Noble Group and the PIC during financing negotiations with Noble subsidiary Noble Resources International on the condition that the information remains confidential and is to be used only in connection with the funding negotiations. Resgen believes this information might have been used for purposes other than those set out in the confidentiality agreement.

Resgen has submitted an application to the Takeovers Panel in which it seeks seeks a declaration of unacceptable circumstances in relation to the affairs of the company, saying that this relates to the association between Altius, Noble Group and the PIC.

Key Contracts and Suppliers
Digby Wells Environmental (mining right application, mine-waste licence, environmental authorisation process for power plant); RSV Enco (engineering, procurement and construction management, or EPCM, for mine construction); FLSmidth Roymec (coal handling and preparation plant); RCE (rail design and construction); Ceenex (water EPCM services), Komatsu Financial Limited Partnership (mobile equipment fleet); and EHL Energy (transmission lines).

On Budget and on Time?
First production has been delayed to late in 2017.

Detailed mining and engineering plans, together with the results of tenders, support the estimated first-stage cost of the mine of $480-million.

Contact Details for Project Information
Resgen (Australia), tel +61 2 9376 9000, fax +61 2 9376 9013 or email info@resgen.com.au; or (South Africa), tel +27 12 345 1057 or fax +27 12 345 5314.
Boikarabelo mine site, tel +27 14 944 0199.
Digby Wells Environmental, tel +27 11 789 9495 or +27 11 504 1400, fax +27 11 789 9498 or +27 11 504 1446, or email info@digbywells.co.za.
RSV Enco, tel +27 11 498 6010, fax +27 11 498 6210 or email enco@rsvenco.com.
RCE, tel +27 12 450 0040 or fax +27 12 450 0060.
FLSmidth Roymec, tel  +27 10 210 4000 or fax +27 10 210 4050.
Ceenex, tel +27 12 347 2620.
Komatsu Financial Limited Partnership, tel +1 888 500 6001 or fax +1 847 437 3199.
EHL Energy, tel +27 11 370 7400 or fax +27 11 834 4203.