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

Client
Resource Generation (Resgen).

Project Description
Boikarabelo has probable reserves of 745-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 tons will be used domestically.

Phase 2, planned for 2020, will involve ramping up production to 20-million tonnes of product 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.

Value
The estimated capital cost for the project has been reduced to $480-million, reflecting reduced costs of the coal handling and preparation plant.

Duration
Resgen’s 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 by the end of 2015.

The mine is expected to begin production in the first half of 2016.

Latest Developments
Protech Kuthele, one of the contractors at Resgen’s Boikarabelo mine has notified Resgen that it has applied to court to terminate its business rescue proceedings and be placed under liquidation.

Protech has been undertaking the earthworks for the rail link, the site infrastructure and the roads. It has removed all staff from the mine site and terminated all activities. Addressing this unforeseen development is expected to delay the completion of the project by three to six months, with first coal production now estimated for the first half of 2016. Based on the previous competitive tender process, Resgen does not expect any difficulty in appointing an alternative earthworks contractor for a similar cost.

Funding negotiations still continue with proposed debt financiers of the mobile equipment, the coal handling and preparation plant and the rest of the site infrastructure.

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 for mine construction), FLSmidth (coal handling and preparation plant), Protech Kuthele (earthworks for the rail link, the site infrastructure and roads), and RCE (rail design and construction).

On Budget and on Time?
First production has been delayed to the last quarter of 2015.

Detailed mining and engineering plans, together with the results of tenders, have reduced the estimated first-stage cost of the mine to $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 86 539 3792.
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.