Name of the Project
Klipspruit life extension (KPSX) project.

Location
Mpumalanga, South Africa.

Project Owner/s
South32 owns 92% of South Africa Energy Coal, with the remaining 8% held by a broad-based black economic empowerment consortium.

Project Description
The brownfield KPSX project will unlock the 616-million-tonne resource at the Klipspruit South and Weltevreden deposits.

The project will be a contract miner operation using existing infrastructure, ramping up to an average of eight-million tonnes a year of saleable export thermal coal production from three opencut pits – Klipspruit South, Pit BD and Pit H.

The project is expected to increase the life of the Klipspruit colliery by more than 20 years.

Potential Job Creation
The project is expected to ensure employment for 740 people and create 4 000 jobs during construction.

Net Present Value/Internal Rate of Return
The investment is expected to generate an internal rate of return of more than 20%.

Capital Expenditure
R4.3-billion.

Planned Start /End Date
The project was approved in November 2017 and expected to start production in 2019.

Latest Developments
South32 reported in its results for the six months ended December 31, 2018, released in February this year that the project was about 33% complete, with first production expected in the second half of the 2019 financial year.

In the six months to December 31, the Klipspruit colliery dragline outage, which resulted in 9% less saleable South Africa Energy Coal production at 12.2-million tonnes, turned out to have a silver lining, as the repair of the dragline highlighted its potential to be in a rehabilitation role or in the KPSX project, which was originally predicated on truck-and-shovel mining.

Major expenditure in KPSX of $140-million is expected in 2019.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The project remains on schedule and budget.

Contact Details for Project Information
South32, tel +27 11 376 2000.