Name and Location
Makhado coking coal project, Limpopo, South Africa.

Client
Baobab Mining & Exploration, a subsidiary of Coal of Africa Limited (CoAL).

Project Description
The Makhado project is CoAL’s anchor project in the Soutpansberg coalfield, in Limpopo, where the company has access to a significant hard coking and thermal coal resource, with the gross tonnes in situ estimated at eight-billion tonnes.

A definitive feasibility study has defined a 16-year life-of-mine, with mining expected to take place at an average rate of 12.6-million tonnes a year of run-of-mine to produce 2.3-million tonnes a year of hard coking coal and 3.2-million tonnes a year of thermal coal at a steady state.

The resource will be mined on an opencast basis, with potential underground expansion.

The project has been divided into the East, Central and West pits for technical, logistical and practical reasons.

Mining will be staggered, starting with the East pit, followed by the Central and West pits. The development of the East pit will include plant and infrastructure components, which will cater for the production volumes from the other pits.

The processing plant will comprise:
• a double-stage dense-medium separation plant to destone and beneficiate the hard coking coal and the thermal product, achieved through a high-gravity wash and followed by a low-gravity wash for the coarse-size fraction of –50 +1 mm;
• a fines (–1+0.15 mm) circuit, encompassing a low-gravity reflux classifier process for the production of the coking coal, and a high-gravity reflux classifier for the production of the thermal product; and
• an ultrafines (–0.15 mm) circuit of Jameson column flotation cells for the production of the coking coal and a potential thermal product.

Net Present Value/Internal Rate of Return
Not stated.

Value
Capital expenditure is pegged at R3.96-billion, including contingency.

Duration
The project is scheduled to start production in 2019.

Latest Developments
CoAL has appointed engineer and project delivery group DRA Projects to carry out the optimisation study and front-end engineering and design (Feed) package for its Makhado coal project, which is scheduled to start production in 2019.

DRA was previously involved in the preparation of a definitive feasibility study for the Makhado coal processing and handling facilities. This work was completed in early 2013.

The scope of the optimisation and Feed assignment expands DRA’s earlier role to include the infrastructure components of the project, as well as the integration of the work by several specialist consultants.

DRA CEO Paul Thomson has said that a key requirement of the current phase will be the identification of appropriate cost-reduction opportunities to optimise the economics of the project in the current challenging market.

CoAL’s current plan is for work on the site to start during the second semester of this year, followed by a 26-month build programme.

Key Contracts and Suppliers
Too early to state.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
CoAL head of engineering Nico Pretorius, email nico.pretorius@coalofafrica.com; or investor relations and business development manager Celeste Harris, email celeste.harris@coalofafrica.com.