Name of the Project
Makhado hard coking coal project.

Location
Limpopo, South Africa.

Project Owner/s
MC Mining has 68% interest in the Makhado project through its subsidiary Baobab Mining & Exploration, with the Industrial Development Corporation of South Africa owning 6.7%, seven local communities owning 20% and the remaining 6% held by a black economic-empowerment industrialist.

Project Description
Makhado has measured and indicated coal resources of 296-million mineable tonnes in situ and proven and probable reserves of 69.3-million.

The bankable feasibility study (BFS) has proposed the production of 25.6-million tonnes of saleable coal over a 22-year mine life, comprising 13.7-million tonnes of hard coking coal and 11.9-million tonnes of 5 500 kcal of thermal coal. The BFS is a key milestone in securing funding for the project.

The BFS envisages the initial mining of the West pit , which will be followed by the mining of the East and Central pits, while the existing coal processing plant (CPP) at the Vele Colliery will be modified, enabling it to simultaneously produce and export-quality thermal coal.

The West, East and Central pits will be mined at a combined average rate of 3.2-million tonnes a year, with the run-of-mine material being crushed and screened at Makhado before it is dispatched to the Vele CPP.

Over the life-of-mine, about two-million tonnes a year of crushed, and screened coal will be transported 134 km to the Vele CPP, where the coal will be processed to produce two marketable products – a midvolatile hard coking coal for sale domestically and internationally and a 5 000 kcal thermal coal for sale on the international market.

Potential Job Creation
The project is expected to create about 650 permanent employment positions.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value of R4-billion and internal rate of return of 38.2%.

Capital Expenditure
R625-million, and a peak funding requirement of R727-million.

Planned Start/End Date
The project is expected to take 12 months to complete.

Latest Developments
MC Mining has secured a R60-million standby loan facility with Denocept Proprietary, a 1.5% shareholder in the company, with some of the funds earmarked for early works at the firm’s Makhado thermal and metallurgical coal project.

Proceeds from the facility will be used to progress early works at the Makhado project, enhance specific areas of the Makhado BFS and geotechnical and confirmatory drilling programmes, as well as fund group working capital.

Key Contracts, Suppliers and Consultants
Minxcon (BFS).

Contact Details for Project Information
MC Mining, tel +27 10 003 8000 or email adminzamcmining.com.