Name and Location
Makhado coking coal project, Limpopo, South Africa.

Client
Baobab Mining & Exploration, a subsidiary of Coal of Africa Limited (CoAL).

Project Description
The Makhado project is CoAL’s anchor project in the Soutpansberg coalfield, in Limpopo, where the company has access to a significant hard coking and thermal coal resource, with the gross tonnes in situ estimated at eight-billion tonnes.

A definitive feasibility study has defined a 16-year life-of-mine, with mining expected to take place at an average rate of 12.6-million tonnes a year of run-of-mine to produce 2.3-million tonnes a year of hard coking coal and 3.2-million tonnes a year of thermal coal at steady state.

The resource will be mined on an opencast basis, with potential underground expansion.

The project has been divided into the East, Central and West pits for technical, logistical and practical reasons.

Mining will be staggered, starting with the East pit, followed by the Central and West pits. The development of the East pit will include plant and infrastructure components, which will cater for the production volumes from the other pits.

The processing plant will comprise:
• a double-stage dense-medium separation plant to destone and beneficiate the hard coking coal and the thermal product using a high-gravity wash and followed by a low-gravity wash for the coarse-size fraction of –50 +1 mm;
• a fines (–1+0.15 mm) circuit, encompassing a low-gravity reflux classifier process for the production of the coking coal and a high-gravity reflux classifier for the production of the thermal product; and
• an ultrafines (–0.15 mm) circuit of Jameson column flotation cells for the production of the coking coal and a potential thermal product.

Net Present Value/Internal Rate of Return
Not stated.

Value
Capital expenditure is pegged at R3.96-billion, including contingency.

Duration
The project is scheduled to start production in 2019.

Latest Developments
CoAL has said its integrated water-use licence (IWUL) for the Makhado project, in Limpopo, has been suspended – less than three months after it was granted.

This followed an appeal, which resulted in an automatic suspension, by the Vhembe Mineral Resources Forum and other parties to the Department of Water and Sanitation, which had granted the 20-year IWUL for the emerging colliery on January 14. The granting of the IWUL was a significant milestone for CoAL, bringing the Makhado project closer to production.

“This appeal has been anticipated and CoAL is . . . preparing an urgent representation to the Water and Sanitation Minister to request that the IWUL remain in full force and effect, pending the final conclusion of the appeal by the Water Tribunal,” CoAL CEO David Brown has told shareholders in a statement.

The group aims to continue its engagement with all stakeholders to ensure the ongoing implementation of its “coexistent model, seeking cooperation between mining, agriculture and heritage land uses”.

Key Contracts and Suppliers
Too early to state.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
CoAL head of engineering Nico Pretorius, email nico.pretorius@coalofafrica.com; or investor relations and business development manager Celeste Harris, email celeste.harris@coalofafrica.com.