https://www.miningweekly.com
Coal|Construction|Financial|Mining|PROJECT|Surface|Products|Operations
Coal|Construction|Financial|Mining|PROJECT|Surface|Products|Operations
coal|construction|financial|mining|project|surface|products|operations

Makhado project’s mine life, coal reserves increase considerably

MC Mining CEO Godfrey Gomwe

MC Mining CEO Godfrey Gomwe

30th June 2023

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

Font size: - +

Coal miner MC Mining’s updated life-of-mine (LoM) plan and coal reserve estimate for its fully-licensed and shovel-ready Makhado steelmaking hard coking coal project has demonstrated a considerably increased mine life, up 27%, at a 25% higher yearly mine production rate.

It has also shown robust project financial returns, while using updated conservative cost, macroeconomic and coal price assumptions.

Proven and probable coal reserves estimates, reported in accordance with Joint Ore Reserve Committee (Jorc) guidelines, have considerably increased, up 53%, from 69-milllion tonnes to 106-million tonnes as a result of the detailed mine designs completed for the East Pit deposit in preparation for mine start.

There is also a 64% increase in salable steelmaking hot coking coal from 13.7-milllion tonnes to 22.5-milllion tonnes achieved at an overall yield of 21.2%; and a 57% increase in saleable coal from 11.9-milllion tonnes to 18.7-milllion tonnes, achieved at an overall yield of 17.6%.

The updated LoM plan is said to be a considerable improvement on the Scenario 2 plan completed in August 2022 to a prefeasibility level of confidence, as is demonstrated by improved production metrics; and using updated and conservative cost and macroeconomic assumptions that account for recent inflationary and market cost escalations in key production inputs.

This has resulted in several improved planned financial returns for the project, including a 20% improvement in free cash flows to $936-milllion; a 17% increase in the post-tax net present value from R5.8-billion to R6.8-billion; an internal rate of return of 37% and an earnings before interest, taxes, depreciation and amortisation margin of 30%.

MC Mining notes that steady progress has been made with critical early works activities in line with the project implementation plan.

The LoM plan builds on the recently completed five-year implementation plan that envisaged initially mining the East Pit. The plan incorporates the exploitation of all portions of the East, Central and West coal deposits that are mineable by surface mining methods.

The coal reserve estimate is derived from this updated LoM plan that applies updated costs, macroeconomic and coal price assumptions.

The updated LoM plan and coal reserve estimate are required to conclude funding.

“The Makhado project continues to progress on schedule in preparation for first coal production to no later than 18 months after construction starts. We are pleased to see a substantial increase in our coal reserves and consequently mine life at a much-improved annual production rate for saleable coal products.

“This bodes well for moving operations down the cost curve while aiming to take advantage of the near-term steelmaking hot coking coal price boons,” comments CEO Godfrey Gomwe

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Rio-Carb
Rio-Carb

Our Easy Access Chute concept was developed to reduce the risks related to liner maintenance. Currently, replacing wear liners require that...

VISIT SHOWROOM 
Weir
Weir

Weir is a global leader in mining technology. We recognise that our planet’s future depends on the transition to renewable energy, and that...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:2.569 2.603s - 147pq - 3rq
Subscribe Now