The Makhado project geological model has been given to MRM, a wholly owned subsidiary of Runge Mining in Australia, to do the mine design and life-of-mine scheduling. This design phase has been completed and it was expected that a scoping study level schedule and operating cost estimation should be completed within the next month.
“The upgrade confirms our view that the Makhado project is capable of becoming a very substantial long-life producer of high-quality hard coking coal. There is substantial global demand for a product of this type and we expect this project to become our primary focus as we take the company forward," said CoAL MD Simon Farrell.
The 1,3-billion tons covered by the resource upgrade were situated on six farms representing about 40% of the total project area. A further resource upgrade was expected before year-end after analysis of data for the remaining 60% of the project area.
The resource upgrade follows further analysis of the borehole data acquired from Exxaro Resources and boreholes completed by CoAL, which have been incorporated into the updated three-dimensional geological model.
Not all of the CoAL borehole sample results have been received from the accredited South African Bureau of Standards (SABS) laboratory yet, but sufficient information was available to issue a resource estimation update.
An estimate of the expected coal quality of the Makhado project has also been undertaken, and the primary product was estimated to be coking coal at 12% ash (air-dried), swell greater than 8,0, and a weight averaged sulphur content of 0,97%. A theoretical yield of about 19,9% was expected for this product.
The project was also expected to yield a middlings product, suitable for use as local thermal coal.
Earlier this month, the company entered into a farm-swap agreement with Rio Tinto gain access to project areas that were contiguous to its Makhado project.
The company’s other interests in South Africa include the Mooiplaats, Thuli and Holfontein coal projects.