Name of the Project
Menar coal and anthracite projects.

Location
Gauteng, KwaZulu-Natal and Mpumalanga, in South Africa.

Project Owner/s
Menar, through its subsidiaries Kangra and Canyon Coal.

Project Description
Menar, through its subsidiaries, expects to produce 20-million tons of coal a year from 2022/23.

Several projects are proposed, including:

• the Bekezela project, located near Springs, in Gauteng. It will be an opencast mine producing 600 000 tons a month of run-of-mine (RoM) coal at steady-state production, with a life-of-mine (LoM) of about 19 years (excluding construction phase).
• the De Wittekrans project, located south of Hendrina, in Mpumalanga, which will be an opencast and underground operation, with an estimated 25-year LoM, based on RoM production of 300 000 tons a month.
• the Witfontein underground and opencast coal project, north-west of Bethal, in Mpumalanga, which has an estimated LoM of nine years, based on RoM production of about 100 000 tons a month.
• the Riversdale Anthracite Colliery project (RAC), in Vryheid, KwaZulu-Natal, will be an underground project with a six-year LoM, based on RoM production of 30 000 tons a month.
• the Springfield opencast project, in Vereeniging, Gauteng, with an LoM of about 36 years, based on RoM production of about 600 000 tons a month.
• the Driefontein opencast project, in Middelburg, Mpumalanga, with an LoM of about eight years, based on RoM production of about 50 000 tons a month.
• the Koppie underground project, in Bethal, Mpumalanga, with an LoM of about 20 years, based on RoM of about 150 000 tons a month.
• the Birmingham underground project, in Hendrina, Mpumalanga, with an LoM of 13 years, based on RoM production of 300 000 tons a month.
• Aasvoëlkrans underground project, 10 km north-west of Utrecht, in KwaZulu-Natal, with a LoM of eight years, which is based on RoM production of about 68 000 t a month.
• Mngeni Shaft will extend the LoM of the Zululand Anthracite Colliery (ZAC), located about 27 km north-east of Ulundi, and has a LoM of about 3.5 years, based on RoM production of about 25 000 t a month.
• the Kusipongo underground project, outside of Piet Retief, in Mpumalanga, with LoM of more than 20 years based on a RoM production of 125 000 tons a month.
• Menar has ramped up the Khanye Colliery, in Bronkhorstspruit, Gauteng, which is producing 2.4-million tons of coal a year. The Hakhano Colliery – the group’s first opencast mine – processing plant will be restarted once a new nearby mining project receives the required authorisations.

Mining operations started at the Phalanndwa Colliery Extension following the first large-scale blasting of coal on July, 17, 2019. The extension project is expected to extend the LoM to 2025. The project has reached steady-state production and is producing an average of 120 000 t a month of RoM.

Potential Job Creation
Menar projects are expected to create 5 600 jobs, including 320 at the Bekezela project, 430 jobs at the De Wittekrans project, 200 jobs at the Witfontein coal project, 200 jobs at the Riversdale Anthracite Colliery and 400 jobs at the Springfield opencast mine. Aasvoëlkrans will create about 70 jobs, and Mngeni Shaft about 200 jobs.

The operating Khanye Colliery employs 400 people. The Phalanndwa Colliery extension project employs 200 people.

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
Menar plans to invest about R7-billion in coal projects from now until 2023 – including R1.5-billion in Bekezela, and R600-million in Phase 1 for De Wittekrans, R1.5-billion in the Springfield project, R700-million in the Witfontein project, R1-billion in the Birmingham and Koppie projects, R300-million in Riversdale Anthracite Colliery, about R388-million in Aasvoëlkrans, and about R130-million in the Mngeni Shaft development.

Planned Start/End Date
De Wittekrans and Bekezela are expected to start production in 2022, while Witfontein is expected to begin in 2023. The development of the Riversdale project will also start in 2022.

The Springfield project is expected to start production in 2023, as is the development of the Birmingham, Koppie and Aasvoëlkrans projects.

Mngeni Shaft will start with production during the second quarter of 2022.

The start dates for the projects are subject to coal market conditions.

Latest Developments
Kangra will extend its LoM through the Kusipongo project.

The Kusipongo resource is situated directly west of the existing mine and is expected to extend Kangra’s LoM significantly.

The Kusipongo mining right has an underground reserve of about 41.9-million tonnes of coal and, based on the latest resource statement, has an estimated LoM of more than 20 years.

Kangra was awarded a mining right for the Kusipongo resource in 2017 and is in the final stages of obtaining the necessary environmental approvals for the different adits needed to access the available resource.

The resource comprises predominantly underground reserves with a few opencast areas. The current mining right authorises underground mining within the north-eastern section of the right area. A Section 102 application has been lodged for three adits – Twyfelhoek, Balgarthen A and Balgarthen B – and opencast areas, which will allow for access to the underground reserves.

The three adits will provide access to about 42.1-million tonnes of coal.

The opencast mining areas comprise the Twyfelhoek (north-east section), Donkerhoek (north-west section) and Balgarthen (southern section) pits, which will collectively mine the remainder of the reserve.

The Twyfelhoek adit is in the final stages of authorisation, with only the mining works programme approval still outstanding. Construction of the access road and adit to Twyfelhoek has started.

The Balgarthen A adit is an existing adit that was mined in the early 1990s. Processes are still under way to obtain the necessary environmental approvals. Kangra intends to start mining operations within the next 10 months at the project.

Once all the environmental approvals for Balgarthen A have been obtained, the company will submit the necessary environmental applications for the Balgarthen B opencast and adit area. The mine expects that it will start mining operations at Balgarthen B within the next 22 months.

The three new mining projects at Twyfelhoek, Balgarthen A and Balgarthen B will initially provide access to about 10.5-million tonnes of coal, which will be mined over the next eight years.

These areas will also allow for access to additional coal, estimated at 32.7-million tonnes, which has the potential of extending the LoM by another 21 years.

The Twyfelhoek adit has a budget of about R78.3-million and current expenditure is within budget. However, the budget excludes any future projects.

Environmental authorisation and a WUL have been received, and lease agreements have been secured with land owners. Mining of the boxcut started in June 2021, with first coal expected in September 2021.

At the peak of the extension project, about 242 Kangra employees and about 260 contractors will be employed.

Community outreach, development and engagement remain key priorities in ensuring the successful extension of the Kangra mine.

The mine has managed to build a good relationship with the forums to ensure that local employment is promoted as far as possible to drive growth in local businesses, as well as the upskilling of the local community.

ZAC’s LoM will be extended by the Mngeni Shaft.

An environmental authorisation and a WUL have been received for Mngeni Shaft, however, before development of the new shaft can start, the pending appeals process must be finalised

The coal reserve associated with the Aasvoëlkrans mining right is about 6.6-million tonnes, for a LoM of eight years. As soon as the WUL is granted, development can start.

Key Contracts, Suppliers and Consultants
ZAC:
Phillips, JA Engineering; Sandvik; Volvo; ZNZ Construction & Projects; Ntwanaza Logistics; Mhobozeli; Beautiful Landscaping; Zululand Bus Services; Zamokuhle MJ Catering & Other Services; Uzamile Trading; Increase Business Construction; Thuthukani Trading Co-Operative; Izithenjwa Corporative Enterprise; Emhlophe Investments & Trading; Khumbulani N Son; Ikusasa Lama Jola; Babazani Construction & Projects; and Dibanto General Services.

Kangra:
Phillips; JA Engineering; Sandvik; Volvo; CAT; Mumnkosi Project & Services; Zama Phangwa Construction; Macina Building & General Maintenance; Mgquzeni Mining; Foloyi Construction and Projects; Donkerhoek Mining Projects (DMS); and DDK Logistics.

Canyon Coal:
Volvo; CAT; Bell; Komatsu; Mbalenhle Tours And Construction; African Pro Mining & Supplies; Dube Solution; Grapeseed Trading 102; Skipgo; Golden Reno Trading and Project; Highlands Commodities cc; Kungwini Mica; Malefo Holdings; Mulwane Trading and Projects; Nduzane General Trade; Phoka Goje Transport and Services; W Masuku Transport and Projects; Zonke General Trading cc; Summer Triangle Trading; Royal Pros Services; Madlayedwa Transport; Mrholozi Group; Kardicks Logisticks; Sesupha Solutions; Netshipise Business Solutions; Future Rise Enterprise; Thuthukisa Izwe Trading; Atang Holdings; IK Mnguni; Kgaditse Prestige Events; Ndimande Logistics and Transport Mancamane Trading Enterprise; SSW Signs & Reflective; Malele Hydraulics; Malefo Mining services; Nkosana Sizwe Trading Enterprise; 1st Episode Trading; Two Mosquitos; Road Science Technology; Armoured Enterprise; Amandla Mining Service; Starcrow 36; Buhlebuta Business Enterprises; JD Hydraulics; Afikile Construction ; NTT Toyota Delmas; Maphangela; Bakone Bakopane; PTM Trading; Khethowakho Trading & Projects; Inelco International; Xclusive energy; BMG Delmas; Morgan Gift; and Enhle projects.

Contact Details for Project Information
Menar tel +27 11 783 7996 or email info@menar.com.