Name and Location
Waterberg coal joint venture project, Limpopo, South Africa.

Client
Waterberg Coal Joint Venture Partners (WCJVP), comprising Firestone Energy and Sekoko Resources.
In October 2013, ASX-listed Waterberg Coal Company (WCC) acquired 45.88%, or 1.63-billion shares, of dual-listed Firestone Energy, resulting in WCC acquiring 32.36% of the coal producer. WWC also acquired 480-million Firestone shares from its 25%-owned subsidiary Sekoko Resources, separately from the takeover offer, representing a further 13.52% interest in Firestone.

Project Description
The project consists of eight farms, in the Waterberg coalfield, totalling 7 979 ha. The identified area over the Smitspan farm (first phase base case) indicates a mine layout covering 507 ha, extending for 3.5 km from east to west and for 1.8 km from north to south.

The project proposes the development of an opencast mining operation to produce ten-million tonnes a year of coal for Eskom for an initial term of 30 years, pursuant to the memorandum of understanding (MoU) that the JV entered into with Eskom in March 2012.

Value
Not stated.

Duration
Not stated.

Latest Developments
Following the delivery of the definitive feasibility study (DFS) on the Waterberg coal project during the last quarter of 2013, Firestone has embarked on an optimisation study while moving to secure financing.

The project’s technical team has narrowed its focus to project value engineering and optimisation.

This will include mine schedule smoothing, savings on mining contractor and plant operating costs, as well as savings on infrastructure and residential costs.

The mining contract comprises the loading and haulage of between 40-million cubic metres and 60-million cubic metres a year of material, which will require the use of forty 240 t trucks.

The Waterberg coal project team has also engaged with local and international process engineering firms for the design, manufacture, supply, delivery, assembly, installation and commissioning of the 22-million-tonne-a-year coal handling and preparation plant in a phased approach within an engineering, procurement and construction framework.

Further, the project team has approached an international rail company, which has demonstrated the ability to increase rail capacity on the Thabametsi Lephalale line, to manage the construction of the rail link.

Meanwhile, negotiations with State-owned power utility Eskom on a coal supply agreement (CSA) are continuing, after the project’s technical team adjusted the economic model to cater for Eskom’s concessions on coal quality to increase the yield and reduce operating costs.

Firestone has pointed that following the completion of the agreement, it expects to conclude discussions on pricing for the CSA .

To arrange project finance, the DFS and accompanying economic model have been provided to Standard Bank.

Key Contracts and Suppliers
SRK Consulting (feasibility study) and Coffey Mining (geotechnical investigation).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Waterberg Coal Company, tel +61 8 9200 4243, fax +61 8 9200 4469 or email info@waterbergcoal.com.au.
SRK Consulting, tel +27 11 441 1111, fax +27 11 880 8086 or email johannesburg@srk.co.za.
Coffey Mining, tel +27 11 679 3331, fax +27 11 679 3272 or email Coffey.Africa@coffey.com.