Name of the Project
Makhado hard coking coal project.

Location
Limpopo, South Africa.

Project Owner/s
Coal miner MC Mining.

Project Description
In August 2022, an assessment was completed with the aim of optimising capital expenditure (capex) and reducing operational costs at Makhado, including possibly moving the Vele CPP and modifying this at Makhado (Scenario 1) or building a bespoke CPP at Makhado (Scenario 2).

These two scenarios will require additional capex, but will significantly reduce the transport costs when compared with the base case scenario proposed in the April 2022 BFS.

Both development scenarios will result in the mining of the East Pit, followed by the Central and West Pits, and the hauling of saleable coal only 72 km from Makhado to the Musina siding.

The option of reducing the Makhado peak funding requirements through a build, own, operate and transfer (BOOT) arrangement will significantly reduce the funding requirement of both scenarios.

Scenario 2, using a BOOT financing arrangement, was chosen as the preferred option because it provides similar results while keeping the Vele CPP intact for future exploitation of that coal resource.

MC Mining has started talks with potential BOOT funding providers.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Scenario 1 has a net present value (NPV), at a 6.1% discount rate, of R5.9-billion and Scenario 2 has an NPV of R5.8-billion.

Scenario 1 has an IRR of 45.2% and Scenario 2 an IRR of 41%, with paybacks of 3.2 and 3.5 years respectively.

Capital Expenditure
Construction capital proposed is R1.1-billion for Scenario 1 and R1.2-billion for Scenario 2.

Planned Start/End Date
Construction period remains at 12 months for all the proposals.

Latest Developments
MC Mining plans to start with certain early works activities at Makhado later this year and, funding dependent, construction is expected to start in early 2023.

Key Contracts, Suppliers and Consultants
Minxcon (BFS).

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