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’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 in the second half of 2017.

The mine is expected to begin production in late-2017.

Latest Developments
Construction of the Boikarabelo mine’s infrastructure has been put on hold, with the exception of three specific projects, while debt funding is finalised major construction activities can start.

Construction in the quarter ended June 30, 2015, included power supply infrastructure, and 13 km of water pipeline associated with the effluent treatment plant.

EHL Energy has completed the erection of power poles and transmission lines for the 132 kV power supply. Construction of the substation and switch room has started and is scheduled to be completed by October 2015. The power supply infrastructure is funded by a deferred payment facility.

The Marapong effluent treatment facility, in Lephalale, and the 58 km pipeline to Boikarabelo are an integral part of the mine’s social and labour plan. Earthworks and pipe installation have been completed for a 13 km section of the pipeline adjacent to a main road.

Meanwhile, all regulatory consents have been received, all necessary land has been acquired and rail haulage and port access contracts, sufficient for the mine’s Stage 1 production have been signed. Sales contracts have been signed that underwrite most of Stage 1 production.

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.