Name and Location
Minas Moatize coal expansion project, Tete, Mozambique.

Client
Beacon Hill Resources, through its subsidiary, Minas Moatize.

Project Description
Minas Moatize has a Joint Ore Reserves Committee-compliant resource of 86.8-million tonnes.

The project proposes to develop a large-scale openpit mine, which will extract and process about four-million tons a year of run-of-mine (RoM) coal at steady state production and produce 2.8-million tonnes of saleable coal a year over 15 years, 30% of which will be coking coal.

Value
Total project capital was estimated at $166-million; however, Beacon Hill has identified a strategy to deliver an estimated $80-million reduction in the proposed capital expenditure (capex) associated with the expansion of Minas Moatize.

Duration
Phase 2A of the wash plant upgrade was completed in May 2013.

Owing to low commodity prices and to reduce the effect of negative cash burn, Beacon Hill will reduce production at its Minas Moatize coking coal project until Phases 2B and 2C of the wash plant upgrade have been completed.

Phases 2B and 2C are scheduled for implementation during the first half of 2014.

Latest Developments
The locomotives and wagons that will enable Beacon Hill to use its 500 000 t/y allocation on the Sena railway line, between Tete and Beira, are expected to arrive in Beira in the first quarter of this year.

The rolling stock is undergoing an independent inspection before being transported to Mozambique using the existing networks in South Africa, Zimbabwe and Mozambique.

Beacon Hill plans to operate two train sets on the Sena railway line, each comprising two locomotoves with 42 rail wagons and being loaded with up to 63 t of coal.

Key Contracts and Suppliers
Global Coke (offtake agreement); Tayanna Mozambique (excavation and coal extraction works), Vitol Coal SA (marketing agreement), Thelo Rolling Stock, RRL Grindrod Locomotives and Transnet Engineering (rolling stock).

On Budget and on Time?
Yes.

Contact Details for Project Information
Beacon Hill Resources executive chairperson Justin Lewis, tel +61 3 96279910 or email info@bhrplc.com.
Thelo Rolling Stock, tel +27 11 290 2300 or email Para.Naidoo@Thelo.co.za.
RRL Grindrod Locomotives, tel +27 12 386 4590 or fax +27 12 386 4611 .
Transnet Engineering, tel +27 86 172 7427.