Name and Location
Vele colliery expansion project, Limpopo, South Africa.

Client
Coal of Africa Limited (CoAL).

Project Description
As at September 28, 2012, Vele had Joint Ore Reserves Committee-compliant resources of:
• 795.7-million gross tonnes in situ and 672.9-million mineable tonnes in situ of shallow-dip coal;
• 362.5-million tonnes, including 42.4-million tonnes of proven reserves and 325.6-million tonnes of probable reserves; and
• 42.4-million tonnes of run-of-mine (RoM) from the central and northern pits over a 16-year period, producing 16.5-million tonnes of saleable product.

The mine is currently configured as an opencast mine, but underground mining is a possibility in the future, owing to the significant resource.

A modular coal treatment plant has been established during the first phase of the project.

CoAL is modifying and expanding its Vele colliery beneficiation plant, which will enable CoAL to optimally produce semisoft coking coal, thermal coal and sized coal simultaneously at an expected processing capacity of 2.7-million tonnes a year of RoM. The planned three-month front-end engineering and design (Feed) process will enable CoAL to arrive at a class 1 engineering, procurement and construction estimate.

The scope of work for the Feed contract includes:
• identifying and improving sections of the existing plant to ensure a 500 t/h throughput capacity;
• a stockpile management philosophy and associated design;
• an RoM handling, crushing and screening section;
• a destoning wash plant;
• a sized-coal screening plant;
• a classifier in the fines beneficiation circuit;
• a froth flotation plant for the beneficiation of the ultrafines; and
• products and discard stockpiling and load-out facilities.

Value
The total capital expenditure to complete plant modification is estimated at R450-million and includes the necessary mine development and production ramp-up.

Duration
The expansion project will be completed by the end of 2015, with production ramp-up in early 2016.

Latest Developments
With the front-end engineering and design (Feed) process, legislative compliance work and technical review for the beneficiation plant modification project at the Vele colliery all expected to be completed by the third quarter of this year, CoAL is on track to start construction of the plant at year-end.

Mineral processing and associated infrastructure solutions company Sedgman South Africa was appointed to undertake the Feed process in February, while the technical review is being completed by Snowden.

Further, CoAL expected to convert current discussions with potential customers into formal offtake agreements during the second half of this year.

Meanwhile, the miner is confident of securing an amended environmental authorisation from the Department of Environmental Affairs during the third quarter.

Extensive work on the application to amend the colliery's integrated water-use licence to include the plant modifications was undertaken during the June quarter, with the application expected to be submitted this month.

Key Contracts and Suppliers
Sedgman South Africa (Feed).

On Budget and on Time?
Not started.

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