Name of the Project
Makhado hard coking and thermal coal project.

Location
Limpopo, South Africa.

Project Owner/s
Baobab Mining & Exploration, the owner of the mining right for the Makhado hard coking and thermal coal project (Makhado project), is majority-owned by MC Mining (69%), formerly Coal of Africa Limited.

The Industrial Development Corporation owns 5% of Baobab’s shares; 20% is held by a community trust, with seven local communities situated in the project’s vicinity being the beneficiaries. The remaining 6% is held by a black industrialist.

Project Description
Makhado is classified as an evaluation asset and has not historically been mined.

The project will be completed in two phases.

Phase 1 will start with the development of Makhado’s west pit, producing three-million tonnes a year run-of-mine coal (RoM). The coal will be mined by an independent mining contractor using truck-and-shovel, modified terrace mining methods.

RoM coal will be partially beneficiated before being dispatched to MC Mining’s modified Vele colliery for processing. About two-million tonnes a year of RoM coal (ex-discard) will be trucked to Vele to be processed at the colliery’s enhanced plant.

The plant modifications consist of, among others, a new fines circuit comprising a reflux classifier in series with the existing spiral plant, a low-density secondary wash plant and a froth flotation plant to capture the ultrafine coal.

At steady state, the operation will produce 1.1-million tonnes of saleable coal –540 000 t/y of hard coking coal (HCC) and 570 000 t/y of 5 500 kcal thermal coal.

The saleable coal will be trucked to the Musina siding for railing to domestic and/or export customers.

Phase 2 involves the implementation of the Makhado Lite plan, which will produce about 1.7-million tonnes a year of saleable coal, comprising 700 000 t/y to 800 000 t/y of HCC, and between 900 000 t/y and one-million tonnes a year of thermal coal. The project involves the development and mining of the east pit, Makhado processing plant and related infrastructure.

Potential Job Creation
Phase 1 mining and processing will be outsourced to experienced third parties who have previously operated in South Africa and is expected to create about 650 permanent employment opportunities.

Net Present Value/Internal Rate of Return
Phase 1 has an estimated internal rate of return of more than 45%, with a payback of 2.5 years.

Capital Expenditure
Phase 1 will cost about R400-million.

Planned Start/End Date
Construction at Makhado and Vele will occur simultaneously and will take nine months to complete, with construction expected to start in the third quarter of 2019.

Phase 2 will be implemented in about 2022.

Latest Developments
The development of Phase 1 was conditionally approved by the directors of MC Mining in March 2019.

Key Contracts and Suppliers
Minxcon (competent person’s report).

Pro­posals for full mining services have been sourced from various contract mining com­panies, with turnkey processing plant
construction and operating quotes obtained from potential service providers.

On Budget and on Time?
Not stated.

Contact Details for Project Information
MC Mining, tel +27 10 003 8000, fax +27 11 388 8333 or email adminza@mcmining.co.za.