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Coal growth prospects


Grootegeluk Medupi expansion
Exxaro board approval for the coal supply agreement and implementation of the project to expand Grootegeluk mine, at a capital cost of R9 billion, was obtained in August 2008. In September 2008 an agreement was concluded with Eskom for the supply of 14,6Mtpa of power station coal for 40 years from Grootegeluk mine to Eskom’s adjacent Medupi power station, currently under construction. The first coal is to be supplied in the last quarter of 2011 with full production from 2014.

Waterberg mine
A pre-feasibility study and geological exploration work on a potential greenfields mine adjacent to Grootegeluk mine is being progressed. This potential mine has the capability of supplying the market with power station and metallurgical coal.

Sintel char project
The commissioning of the Sintel char plant at Grootegeluk mine to produce reductants for the ferroalloy industry is behind schedule. This is due to delays experienced with construction contractors. Ramp-up of the facility began in August 2008 but was delayed to February 2009 when the refractory lining of the four retorts failed during the heating process. All retorts should be commissioned by end-June 2009, with full production of 160ktpa estimated by the end of the year.

Market coke

A feasibility study on producing high-quality market coke from semi-soft coking coal produced at Grootegeluk mine is under review.

Mafube coal mine
Commissioning of the Mafube expansion project, at a capital cost of R1,9 billion, in which the group is a 50:50 joint venture partner with Anglo Coal, has been completed and ramp-up to full capacity was reached by end-2008. At full production, the mine will produce 3Mtpa of export steam coal and 2Mtpa of power station coal.

Inyanda coal mine
Commissioning of the beneficiation plant at the R290-million Inyanda mine was successfully completed in
the second quarter of 2008. Full production of 1,5Mtpa, mostly for the export market, was exceeded by the end of the year.

The Blackhill railway siding has been successfully commissioned and is being operated at design capacity.
This is currently the only train-loading facility in Exxaro where Jumbo railway wagons can be loaded to full capacity.

Eerstelingsfontein reserve
All mining authorisations and regulatory approvals for mining the Eerstelingsfontein reserves near Belfast to supply 1Mtpa of product to the local market have been obtained. Full production is expected by the second quarter of 2009.

Moranbah South resource
Exploration of the hard coking coal resource on the adjacent properties of Moranbah South and Grosvenor South in Queensland, Australia, in joint venture with Anglo Coal Australia, is progressing according to schedule. Exploration is focused on geological work to delineate long-wall mining resources. The potential for bord-and-pillar mining operations will also be explored. Moranbah South has the potential to produce large volumes of premium-quality hard coking coal.

Diepspruit reserve

Development of the Diepspruit reserve at New Clydesdale (NCC) is planned to produce its first coal by the second quarter of 2009. At full production, the R136-million project will produce 1,3Mtpa run-of-mine coal for beneficiation at NCC for supply to the export steam coal market.

Co-generation project
Exxaro formed a joint venture with Promethium Carbon to develop co- and on-site generation projects of up to 200MW each. The bankable feasibility phase for some of these projects is nearing completion and discussions are under way with host parties on offtake agreements and contractual arrangements. It is anticipated that three projects will be initiated in 2009.

Botswana Gas project
Exxaro has concluded an agreement with Sekaname (Pty) Limited to begin a coal-bed methane exploration
programme in Botswana. The focus of the study will be to prove economic gas flow rates from coal-bed methane seams. The purpose of the joint venture, in which Exxaro has a 75% interest, is to explore the feasibility of creating a gas-based energy business.

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