Name of the Project
Makhado hard coking coal project.

Location
Limpopo, South Africa.

Project Owner/s
MC Mining has 67.3% 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 is a fully licensed and shovel-ready steelmaking hard coking coal project.

Proven and probable reserves have increased from 69-million tonnes in the five-year implementation plan, released in August 2022, to 106-million tonnes in the updated life-of-mine (LoM) plan and a coal reserve estimate released in June 2023. This is because of the detailed mine designs completed for the East pit deposit in preparation for mine start.

Steelmaking hard coking coal has increased from 13.7-million tonnes to 22.5-million tonnes.

The LoM plan incorporates the exploitation of all portions of the East, Central and West coal deposits that are mineable by surface mining methods.

Production is estimated at four-million tonnes a year of run-of-mine (RoM).

Coal handling and processing plant capacity is estimated at four-million tonnes a year, which has resulted in planned yearly sales of 64 midvolatile steelmaking coal and hard coking coal of 801 000 t, and yearly sales of 5 500 kcal thermal coal of 620 000 t.

Total saleable coal products are estimated 41-million tonnes over the 28-year mine life.

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, at a 6% discount rate, of R6.8-billion and internal rate of return 37%, with a payback of about 3.5 years.

Capital Expenditure
Total LoM capital is estimated at R2.49-billion.

Planned Start/End Date
The time to first production is estimated at 18 months.

Latest Developments
An updated LoM plan and coal reserve estimate for the Makhado steelmaking hard coking coal project have significantly increased the LoM and improved the project's economics.

The increased coal reserves in the East Pit have resulted in increased saleable tonnes, which have been confirmed by the most recent drilling programme.

Since the August 2022 announcement of prefeasibility studies at the project, coal reserves have increased by 53%, with saleable steelmaking hard coking coal reserves having increased by 64% and saleable thermal coal reserves by 57%.

The Makhado early works activities are continuing, with funding activities expected to be concluded in the second half of 2023. The tender processes to select the outsourced mining, plant and laboratory operators have also started.

MC Mining is also continuing to progress critical Makhado early works, including the start of detailed design, procurement and construction of the power supply overhead transmission line, with a construction team mobilised on site. MC Mining considers this to be a critical path activity.

Additionally, refurbishment of on-site accommodation to house project construction crews has been undertaken, as have the placement of orders for key long-lead time items, including the payment of a deposit of R19-million.

MC Mining has also finalised the mobilisation of contractors for the construction of the main access road, main bridge and civil works for bulk water reticulation. The company has also reported progress with the erection of fencing to secure the project site.

Key Contracts, Suppliers and Consultants
Minxcon (BFS and potential alternative development scenarios for Makhado); and Erudite (detailed planning for a full process design for Makhado).

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